Total nonfarm payroll employment rose by 164,000 in July, in line with average employment growth in the first six months of the year, reported the U.S. Bureau of Labor Statistics. And the unemployment rate was unchanged at 3.7 percent.
“The July jobs report was on par with expectations, adding 164,000 jobs, including 148,000 in the private sector, to hit a new record total for the U.S. labor force,” said Matt Dolly, research director at Transwestern. “It should also be noted that the May and June jobs reports were revised, resulting in a reduction of 41,000 jobs from the previously reported numbers for those months. The average monthly gains for 2019 is at its lowest level since 2010. However, despite the increase in the labor participation rate, the availability of labor remains constrained due to the growth that has taken place during this 10-year economic expansion, the longest on record. Also, the slow and steady growth bodes well to avoid overheating and gives reasons for the Fed to lower rates further this year.”
“Factors to consider include the newly imposed tariffs on China that are expected to take place in September,” added Dolly. “This could have an adverse effect on the economy as retail prices would likely rise and consumers would get squeezed, potentially reducing overall consumer spending, which had a slow start to the year but experienced strong growth in the second quarter. It could also lower overall shipping volumes, which have been setting records, and decelerate the growth of the industrial real estate market. Investors should keep watch on the Federal Reserve, as lower rates would certainly benefit the commercial real estate sector. Overall, as job growth remains steady and wages continue to rise, it is anticipated that the U.S. economy will perform well for the foreseeable future.”
In 2018, employment gains had averaged 223,000 per month. In July, notable job gains occurred in professional and technical services (up 31,000), healthcare (up 30,000), social assistance (up 20,000), and financial activities (up 18,000).
