5 things to know about the jobs report
It's disappointing because job creation is minimal. But manufacturing is gaining -- a lone bright spot.
It was a disappointment. Financial markets certainly think so. The Dow Jones industrials ($INDU) were down 137 points to 10,538 at 11:20 a.m. ET.
The Labor Department said the private sector created only 71,000 jobs in July, and the U.S. unemployment rate was stuck at 9.5%. A broader measure of unemployment that includes people who want full-time jobs but can't get them or who have dropped out of the work force was at 16.7%, down slightly from 16.8% in June.
Here are five more things to know about the report.
Manufacturing employment continues to improve. This is probably the brightest part of the jobs report. Employment in the sector fell 32% between January 2000 and now, and 17.6% between the end of 2006 and the end of 2009.
But manufacturing employment has risen for seven straight months, adding 183,000 jobs. OK, it's only a 1.6% gain from the end of 2009, but there haven't been seven straight months of gains in manufacturing since an 18-month streak of gains from October 1996 until March 1998. Today's report says 36,000 manufacturing jobs were created in July alone.
Much of the gain is due to improvement in the auto industry, which had fewer summer layoffs than normal in July. So employment grew by 21,000. That comes on top of a gain of 32,000 in the first half of the year.
Construction remains a disaster. This should not be a surprise, given the housing bubble that erupted between 2002 and 2007. Overall construction employment has fallen 6.3% in the past year, with declines in every month. Residential construction employment has fallen in eight of the past 12 months and is 8.9% lower than a year ago.
Residential-construction employment grew 23.6% between January 2000 and its peak in 2006. It's down 43% since and is at its lowest level since 1993. That's a big reason the jobs picture is so difficult.
The financial sector is weak. This also should not be a surprise, since the recession that erupted after 2007 was really a financial recession. Employment in the sector fell 8,000 in July. The sector has lost 98,000 jobs in the past year.
Employment in the sector grew 8.9% between January 2000 and its peak in December 2006. It's off 8.7% since. In other words, all the finance jobs created in the first seven years of the century have disappeared.
The number of hours worked is stagnant. This feeds into the theory that employers are reluctant to expand. Hours worked per week in July was 34.2, up slightly from June. Except that it has hovered about 34 hours for more than a year.
Long-term unemployment remains a big problem. The report said that people out of work for 27 weeks or more remained stuck at 6.6 million. This group makes up 44.9% of the total of people who are unemployed. That's down slightly from June but up from 34.2% of the unemployed in July 2009.
Those who work in sales or offices appear most vulnerable. The report says unemployment in this group grew from 3.2 million to 3.4 million in the past year.
There's a demographic issue at work as well. The number of employed men and women between 35 and 54 has fallen in the past year. Almost every other age group is showing employment gains.
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[BRIEFING.COM] The stock market capped the trading week with losses across the major averages. The S&P 500 fell 0.5% to surrender its weekly gain, while the Dow Jones Industrial Average (-0.7%) and Russell 2000 (-0.9%) underperformed. The two indices posted respective losses of 0.8% and 0.6% for the week.
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