The U.S. economy added 209,000 jobs in July, according to the Bureau of Labor Statistics’ report this morning. That’s just below what analysts had been forecasting, around 230,000 jobs, but it’s a seventh month in a row with more than 200,000 jobs added. Revisions to the previous two months’ data weren’t that big, but those two solid months got even better: June saw 298,000 jobs added and May saw 224,000 added.
In other good news, the civilian labor force grew by about 300,000 persons, pushing the labor-force participation rate up — albeit a tiny one-tenth of a percentage point. That’s a small gain, but small gains are better than what most months of this recovery have offered. And, of course, that labor-force participation rate remains at a multi-decade low — but it isn’t falling anymore. Jobs growth of just over 200,000 jobs a month is hardly anything to get excited about, but the firming up of the labor force is a new and encouraging sign.
That is in fact one of the few things many conservatives dissatisfied with the pace of this economic recovery may agree with Federal Reserve chairman Janet Yellen about: One should look at a broad range of labor-market statistics to tell whether Americans are getting the jobs they want, rather than just the headline unemployment rate (which looks at whether Americans who’ve actively looked for a job in the past month have one (leaving out, for instance, people who want a job but aren’t looking). As Sam Ro of Business Insider pointed out this morning before the report came out, relying on “a range of labor-market indicators” (as Yellen says she does, and as one does if they point to, say, the U-6 “true unemployment” number or the labor-force-participation rate) can be complicated and risky. Because the Fed has to pick the various indicators and weight them, it leaves more discretion up to them about whether inflation risks are rising or how much slack there is left in the labor market. This month, though, offers Yellen a reprieve: The fact that the unemployment rate, the single standard metric the Fed used to use, ticked up even as a nice number of jobs were added supports the conclusion the Fed has been drawing from its now-preferred “range of labor-market indicators” (that is, that there’s still lots of slack left in the labor market).
The weakest part of the report, probably: Hourly wages didn’t rise in July, and nor did hours worked, essentially. That’s definitely not good news, but if workers are returning to the labor force, it’s also not surprising.