WASHINGTONThe U.S. unemployment rate was 3.9 percent in July, the Bureau of Labor Statistics reported, as businesses claimed to create a net of 170,000 new jobs last month. Governments shed 13,000 workers, BLSs separate survey showed. Local governments lost 6,100, and local schools lost another 13,900, due to the summer break.
BLS said there were 6.28 million unemployed last month, 284,000 fewer than in June. But while joblessness declined by 0.1 percent in July, weekly wages did, too.
Weekly wages fell by 28 cents in July, and even declined by three cents in the lowest-paid sector, bars and restaurants, BLS reported. There, the average worker earned $417.34 weekly, 44 percent of what the average worker nationwide earned each week in July.
Nominal wages grew 2.7 percent year-over-year, matching last months rate, said Economic Policy Institute analysts Valerie Wilson and Jessica Scheider. This continued slow wage growth is an obvious sign the economy is not at full employment, and there are no indications wage growth is accelerating. Clearly, employers are still not feeling pressure from a tightening labor market to increase wages.
Low wage growth means the low unemployment rate looks to be overstating the strength of the labor market, they added. Without signs of accelerating inflation, we should see just how much we can usefully nudge up wages.
A tighter labor market would disproportionately benefit black and Hispanic workers, whose unemployment rates are 6.6 percent and 4.5 percent, respectively, as compared to white workers whose unemployment rate dropped to 3.4 percent, the two said.
For once, high-paying job sectors factories and construction were among the leaders in adding jobs. Factories added 37,000 jobs in July, to 12.75 million, with the biggest share (+13,100) in transportation equipment. Some 339,000 (3.5 percent) of factory workers were unemployed in July.
Construction added 19,000 jobs in July, to 7.24 million, leaving 333,000 (3.4 percent) jobless construction workers at the height of the building season. But construction union leaders note the official figures may understate joblessness in their industry, since a worker toiling one day during the BLS survey week is counted as employed for the whole month. Specialty trade contractors (+14,200 jobs) accounted for most of constructions gains.
But the other big gains were in low-paying areas of the service sector: Temps (+28,000 jobs), bars and restaurants (+26,000), health care (+16,700) and social assistance (+16,800).
Source: PAI