The Herald Bulletin

Morning Update

Breaking News

August 2, 2013

US employers add 162K jobs; rate falls to 7.4 pct.

WASHINGTON — U.S. employers added 162,000 jobs in July, a modest increase and the fewest since March. At the same time, the unemployment rate fell to a 4½-year low of 7.4 percent, a hopeful sign.

Unemployment declined from 7.6 percent in June because more Americans found jobs, and others stopped looking and were no longer counted as unemployed.

Still, Friday's report from the Labor Department pointed to a less-than-robust job market. It suggested that the economy's subpar growth and modest consumer spending are making many businesses cautious about hiring.

The government said employers added a combined 26,000 fewer jobs in May and June than it previously estimated. Americans worked fewer hours in July, and their average pay dipped. And many of the jobs employers added last month were for lower-paying work at stores, bars and restaurants.

For the year, job growth has remained steady. The economy has added an average 200,000 jobs a month since January, though the pace has slowed in the past three months to 175,000.

Nariman Behravesh, chief economist at IHS Global Insight, called the employment report "slightly negative," in part because job growth for May and June was revised down.

Scott Anderson, chief economist at Bank of the West, said it showed "a mixed labor market picture of continued improvement but at a still frustratingly slow pace."

The reaction from investors was muted. The Dow Jones industrial average fell about 9 points in midafternoon trading. The yield on the 10-year Treasury note fell to 2.62 percent from 2.71 percent.

The Federal Reserve will review the July employment data in deciding whether to slow its $85 billion a month in bond purchases in September, as many economists have predicted it will do. Weaker hiring could make the Fed hold off on any pullback in its bond buying, which has helped keep long-term borrowing costs down.

Beth Ann Bovino, senior economist at Standard & Poor's, said she thinks Friday's report will make the Fed delay a slowdown in bond buying.

"September seems very unlikely now," she says. "I'm wondering if December is still in the cards."

Still, it's possible that the lower unemployment rate, along with the hiring gains over the past year, could convince the Fed that the job market is strengthening consistently.

"While July itself was a bit disappointing, the Fed will be looking at the cumulative improvement," said Paul Ashworth, chief U.S. economist at Capital Economics. "On that score, the unemployment rate has fallen from 8.1 percent last August to 7.4 percent this July, which is a significant improvement."

The government uses a survey of mostly large businesses and government agencies to determine how many jobs are added or lost each month. That's the survey that produced the gain of 162,000 jobs for July.

It uses a separate survey of households to calculate the unemployment rate. That survey captures hiring by companies of all sizes, including small businesses, new companies, farm workers and the self-employed.

The household survey found that 227,000 more people said they were employed last month. And 37,000 people stopped looking for work and were no longer counted as unemployed.

The number of self-employed jumped 241,000, or 2.6 percent, to 9.7 million — the most in eight months. This group includes freelance workers, construction contractors, lawyers and other professionals with solo practices and farmers and ranchers.

Combined, those factors explain why the unemployment rate declined from 7.6 percent to 7.4 percent.

More than half of July's job gain came from lower-paying industries, extending a trend that is limiting Americans' incomes and possibly slowing consumer spending. Retailers, for example, added nearly 47,000 jobs — the biggest gain for any industry last month. Restaurants and bars added 38,400.

One Atlanta-based retailer, Cellairis, which sells mobile phone accessories, says it hired about 75 employees last month to meet growing demand. The company has 650 U.S. outlets, nearly all of them mall kiosks. It plans to add 45 walk-in stores this year.

"People are willing to spend more now to protect and personalize their devices," said CEO Taki Skouras.

By contrast, employers in higher-paying industries, like Stripmatic, a steel parts maker in Cleveland, remain wary. Stripmatic hasn't hired anyone since adding five workers in the first three months of the year. Revenue has been 10 percent below projections this year.

The company's exports have picked up a bit in Mexico and Brazil but remain flat in Asia. Company President Bill Adler says he's concerned that slower growth in China could hamper his overseas sales this year.

Low-paying industries have accounted for 61 percent of jobs added this year, even though they represent only 39 percent of U.S. jobs overall, according to Labor Department numbers analyzed by Moody's Analytics. Mid-paying industries have accounted for fewer than 22 percent of the jobs added.

Some job gains were made in higher-paying fields last month. Financial services, which includes banking, real estate and insurance, added 15,000. Information technology added 4,300, accounting 2,500. And manufacturing added 6,000 jobs, though that figure was offset by an equivalent loss in construction.

One growing source of better-paying jobs is local governments. They've now added jobs for five straight months and have helped offset job cuts by state and federal governments.

The result is that governments overall are much less of a drag on hiring than they were earlier in the economic recovery. All told, they've shed 39,000 jobs in the 12 months that ended in July. That's down from a loss of 137,000 in the 12 months that ended in July 2012.

Most of the hiring by local governments has been for teachers and other jobs related to education. Local property tax revenue, a key source of funding for counties and cities, fell after the recession but has begun to recover in some communities. Nationwide, home prices have risen steadily, a trend that typically leads to higher property tax revenue.

More broadly, many of the jobs added in July are only part time. The number of Americans who said they were working part time but would prefer full-time work stands at 8.2 million — the highest since last fall. Part-time jobs account for 65 percent of the jobs added in July and 77 percent of those added this year.

The percentage of Americans either working or actively looking for work dipped in July to 63.4 percent. This is called the "labor force participation rate." The participation rate has been generally declining since peaking at 67.3 percent in 2000. That's partly the result of baby boomers retiring and leaving the workforce.

Job gains are being slowed by the economy's tepid growth. It grew at an annual rate of just 1.7 percent in the April-June quarter, the government said this week. That was an improvement over the previous two quarters, but it's still far too weak to rapidly lower unemployment.

Recent data suggest that the economy could strengthen in the second half of the year. The housing market is rebounding. Factories increased production and received a surge of orders in July, propelling the fastest expansion in more than two years.

Businesses have ordered more equipment for four straight months. Europe's troubled economies are showing signs of recovery, potentially a lift to U.S. exports.

U.S. automakers are reporting their best sales since the recession, a sign that Americans are confident enough in their finances to make large purchases. Car sales rose 14 percent in July from 12 months earlier to 1.3 million.

 

1
Text Only
Breaking News
  • SPT - HB0726 - Thomas - Colts Camp day two 252 Reports: Colts OL Thomas out for season again Several media outlets are reporting Indianapolis Colts left guard Donald Thomas again has torn his right quad and will miss the 2014 season.

    July 31, 2014 1 Photo

  • NWS - HB0706 - scooter - 04 Police say new mo-ped law hard to enforce KOKOMO — With more and more mo-peds hitting the streets, police are having a hard time enforcing new restrictions encompassed in the new scooter law.Mo-ped drivers can still cruise the streets and roads on their two-wheel machines, but the new state

    July 31, 2014 1 Photo

  • Venue change granted for blast suspect A judge granted a change of venue Wednesday for the trial of one defendant in a deadly Indianapolis house explosion after prosecutors dropped their objection.

    July 31, 2014

  • Boyfriend of missing Shelbyville woman arrested Authorities searching for a missing central Indiana woman have discovered what they believe to be human remains and have arrested the woman's boyfriend.

    July 30, 2014

  • Pence pushes Medicaid alternative with HHS chief Gov. Mike Pence has told U.S. Health and Human Services Secretary Sylvia Burwell that he wants to maintain Indiana's "freedom and flexibility" under any expansion of Medicaid.

    July 30, 2014

  • Indianapolis mayor backs tax to hire more officers

    Indianapolis Mayor Greg Ballard is seeking a tax increase to pay for hiring more police officers as part of a wide-ranging response to the city's recent surge in deadly violence.

    July 30, 2014

  • Colts Camp update: Will injured players return?

    Cornerback Vontae Davis and safety LaRon Landry have yet to participate in a training camp practice, and running back Trent Richardson has missed four straight after running through drills on opening day. Indianapolis Colts head coach Chuck Pagano doesn't want to rush any of those players back onto the field. But he made it clear Wednesday morning at Anderson University that he hopes to see them back soon.

    July 30, 2014

  • Ticket me Elmo? NYC mulls law for impersonators

     New York City officials are turning up the heat on Elmo, Cookie Monster and Statue of Liberty impersonators — Times Square costumed characters who often demand money for posing in photos with tourists.

    July 30, 2014

  • US economy grew at strong 4 percent rate in spring

    After a dismal winter, the U.S. economy sprang back to life in the April-June quarter, growing at a fast 4 percent annual rate on the strength of higher consumer and business spending.

    July 30, 2014

  • Pence wants immigrant children taken out of state

    Gov. Mike Pence is asking that more than 200 immigrant children placed in Indiana be deported and chiding President Barack Obama for not alerting him of the placements.

    July 30, 2014

Featured Ads
More Resources from The Herald Bulletin
AP Video
Small Plane Crash in San Diego Parking Lot Busy Franco's Not Afraid of Overexposure Fighting Blocks Access to Ukraine Crash Site Dangerous Bacteria Kills One in Florida Workers Dig for Survivors After India Landslide Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN Raw: Deadly Landslide Hits Indian Village Obama Chides House GOP for Pursuing Lawsuit New Bill Aims to Curb Sexual Assault on Campus Russia Counts Cost of New US, EU Sanctions 3Doodler Bring 3-D Printing to Your Hand Six PA Cops Indicted for Robbing Drug Dealers Britain Testing Driverless Cars on Roadways
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Helium debate
Helium
Front page
Poll

Do you think school is starting too early?

Yes, it shouldn't start until after Labor Day.
Yes, it shouldn't start for another week or so.
No, it's about right.
Not sure.
     View Results