July Jobs Report

The Labor Department reported last Thursday that nonfarm payrolls rose 223,000 last month after a downwardly revised 254,000 increase in May, with construction and government employment unchanged, and the mining sector purging more jobs.

April payrolls were also lowered, meaning 60,000 fewer jobs were created during the two months than previously reported. The unemployment rate fell two-tenths of a percentage point to 5.3 percent, the lowest since April 2008, but that was a sign of weakness as 432,000 people dropped out of the labor force.

Still, June’s payrolls increase ran well above the average for the first five months and the jobless rate is near the 5.0 percent to 5.2 percent range most Fed officials consider consistent with full employment.

Wage growth has picked up slightly this year, but gains remain relatively restrained. Over the last 12 months, wages are up 2 percent, only modestly ahead of inflation, which is running at around 1.5 percent, according to the latest data.

The share of American adults either working or looking for a job, which in many ways is a better gauge of economic strength than the oft-cited unemployment rate, fell 0.3 percentage point in June. With June’s drop to 62.6 percent, the so-called labor participation rate is now at its lowest since 1977. Among prime-age adults, those 25 to 54, there has been no improvement in participation this year.

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