According to the Bureau of Labor Statistics, the US economy added 943,000 jobs in July, and the unemployment rate fell to 5.4 percent, a new low for the pandemic era.
It was the largest job gain since August of last year, when more than 1 million jobs were added back, and it exceeded economists’ expectations of 870,000 jobs.
The number of jobs added in June was also revised up to 938,000, demonstrating the recovery’s rapid pace over the summer.
On Twitter, Harvard economist Jason Furman wrote, “I have yet to find a blemish in this jobs report” (TWTR).
Since May 2020, the United States has added 16.7 million jobs. However, it is still 5.7 million below the pre-pandemic level.
The hospitality and leisure industries, which were decimated by lockdown measures last year, were once again the leading contributors to job growth, accounting for more than a third of all new jobs. Last month, restaurants and bars alone added 253,000 new jobs.
While the rapid expansion is encouraging, the industry has lost 1.7 million jobs since February of last year.
According to seasonally adjusted data, hiring increased in education as well. However, because the pandemic distorted hiring and layoffs in education, the adjusted data may overstate hiring in July, according to the labor bureau.
The average hourly wage increased for the fourth month in a row, rising 11 cents to $30.54, as companies are under pressure to pay more to attract workers.
The unemployment rate fell to its lowest point since the pandemic began, with declines seen across nearly all demographic groups surveyed.
Black teenagers’ unemployment rate increased by four percentage points to 13.3 percent.
The labor force participation rate increased to 61.7 percent, while the employment-population ratio rose to 58.4%. Both indicators are still below where they were in February 2020.
“The stagnant participation rate confirms that there are millions of potential workers who are still outside the labor force, not currently looking for work and therefore not counted among the unemployed,” said Cailin Birch, global economist at The Economist Intelligence Unit.
However, nearly a million people found work in July, which Birch believes is a positive sign for both the jobs recovery and consumer spending, both of which the US economy requires to grow.
The pandemic recovery has been marked by a mismatch between employers’ demand for workers and employees’ ability and willingness to return to work despite childcare concerns, virus fears, and generous benefits.