Economy Adds 209,000 Jobs in July, Wage Growth Stagnant

The latest jobs numbers are out from the federal government. What do they mean for job seekers and employers? Here’s a quick take from Glassdoor’s Chief Economist Dr. Andrew Chamberlain: This morning’s jobs report revealed the economy continued its remarkable summer growth spurt in July, with employers adding a robust 209,000 jobs to payrolls and an unemployment rate down to 4.3 percent -- the nation’s 82^nd consecutive month of positive job gains. Thanks in part to continued positive news from the labor market, the labor force grew by 349,000 workers in July. That helped boost the labor force participation rate -- the fraction of Americans who are working or looking for a job -- to 62.9 percent this month, up 0.1 percentage points from last month. One weak point in today’s jobs report was wage growth. According to Glassdoor’s Local Pay Reports, median base pay for full-time workers was up just 1.2 percent from a year ago in July -- a pace that has fallen for six consecutive months. Today’s BLS figures show average hourly pay grew at just 2.5 percent, the same pace it has stagnated at for several months. There are several theories for why wages are growing slowly, which we've explained here. Despite a roaring U.S. labor market, today’s report shows that average wage growth remains stubbornly muted. Until that trend reverses, the gains from today’s economy will not be translating into improved paychecks for the average American worker, ultimately putting a damper on the consumer spending that makes up about two-thirds of overall GDP growth. The industries with the strongest job gains in July were leisure and hospitality (+62,000 jobs), professional and business services (which includes many tech jobs) (+49,000 jobs), health care (+45,000 jobs), and manufacturing (+16,000 jobs). The sectors with the weakest job growth in July were utilities (-900 jobs), mining and logging (0 jobs added), transportation and warehousing (+900 jobs), and retail (+900 jobs). Despite political turmoil in Washington, D.C., rising Fed interest rates, and an economic expansion that is now 97 months (more than eight years) old, the U.S. economy shows no signs of slowing on the horizon. As the economy edges toward full employment, we’ll be watching closely for signs of accelerating pay growth for American workers.