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Job Market Tanks in July
In addition to delivering that sobering news, the US Department of Labor (DoL) also cut its tally of job growth in May and June by a combined 61,000, adding to the report’s weak tenor. The one bright spot of the data release was that the July jobless rate ticked down to 5.5% from 5.6%.
Friday’s DoL report hit Wall Street analysts like a ton of bricks since economists participating in Reuters regular survey had been predicting a non-farm payroll gain of 228,000. According to the DoL, the non-farm economy has added a total of 1.5 million new jobs since August. 2003.
Looking at July’s data, e mployment gains in health care and social assistance and in professional and business services were partly offset by job losses in financial activities. In the financial sector, employement fell by 23,000 in July. The credit intermediation industry, which includes mortgage banking, shed 16,000 jobs over the month. Securities, commodity contracts, and investments lost 4,000 jobs.
In the service sector, employment in health care
and social assistance continued to grow, with an increase
of 20,000 in July. Year to date, employment in this
industry has risen by 292,000. Over the month,
employment rose in ambulatory health care services, such
as home health care services and outpatient care centers,
and in hospitals. Child day care services added
7,000 jobs in July, following a gain of 8,000 in June.
Employment also continued to trend up in professional and
business services in July. That industry has added
622,000 jobs since its most recent low in March
2003. Employment in temporary help services was
little changed in July. Wholesale trade employment edged
up in July, as its durable goods component added 11,000
jobs. Wholesale trade has gained 65,000 jobs since
October 2003, with most of the increase in durable goods
distribution.
In the goods-producing sector, manufacturing employment
edged up 10,000 in July. Since its most recent low
in January 2004 manufacturing employment has risen
by 91,000, almost entirely in the durable goods area. In
July, there were job gains in computer and electronic
products, machinery, furniture, and paper and paper
products. Employment growth in these and other
manufacturing industries was partly offset by a decline
of 21,000 in transportation equipment manufacturing,
reflecting larger-than-usual shutdowns of auto parts and
assembly plants for annual retooling.
In July, construction employment was little changed for
the second month in a row. The industry had added
an average of 18,000 jobs per month from March 2003
through May 2004.