July jobs report: What does it mean?

The US economy added 163,000 jobs last month -- far more than expected, but not enough to keep the unemployment rate from rising.

By TheWeek.com Aug 3, 2012 1:25PM

Image: Resume (© Dynamic Graphics/age fotostock/age fotostock)Defying expectations, the U.S. economy added 163,000 jobs in July, according to a Labor Department report released Friday. Most analysts had predicted monthly growth of just 100,000 jobs, but surprising growth in the education and health services sectors -- which lost jobs in June, but gained 38,000 jobs in July -- helped tip the balance. 


Meanwhile, manufacturing added 25,000 posts, and professional and business services added 49,000. Still, the unemployment rate crept up to 8.3%. 


A closer look at what the numbers mean:


1. The July numbers are the best in months
Last month's gains are the best since February, when the economy added a whopping 240,000 jobs. The July stats also break a somewhat dismal three-month streak in which the economy added only about 75,000 jobs per month.


2. But overall, the U.S. economy is still stagnant
Step back from July's gains, look at the first seven months of the year, and you'll see that the economy has only added about 151,000 jobs a month on average, on par with last year's sluggish pace. That's "enough to keep up with population growth," says Christopher S. Rugaber of The Associated Press, "but not enough to drive down the unemployment rate." Remember, 12.8 million Americans are still unemployed.


3. The unemployment rate keeps ticking up
The much-watched jobless rate, which had steadily fallen to 8.1% in April -- the lowest rate since January 2009 -- is climbing again. The unemployment rate hit 8.2% in May and June, and in July, it jumped to 8.3%. Why is it inching up despite solid job gains? Mostly, says Phil Izzo at The Wall Street Journal, "because the two numbers come from separate reports. The number of jobs added -- the 163,000 figure -- comes from a survey of business, while the unemployment rate comes from a survey of U.S. households. The two reports often move in tandem, but can move in opposite directions."


4. The Federal Reserve may be forced to act
Earlier this week, the Federal Reserve declined to take any new steps to help the struggling economy, saying only that it would "closely monitor" the situation, and provide assistance "as needed." But "should the recovery remain weak," say Jeffrey Sparshott and Tom Barkley at The Wall Street Journal, the Fed looks "poised to launch a new round of stimulus." By the time the board meets again in September, it will have two more jobs reports -- July and August -- to ponder when deciding its next move.


5. This gives the GOP ammo to fire at Obama
While the 163,000-jobs figure would seem to be good for President Obama's re-election effort, "the unemployment rate has been above 8% since his first month in office," says Rugaber. That's the longest stretch on record, and no president since World War II has successfully faced re-election with an unemployment rate over 8%. GOP presidential candidate Mitt Romney responded swiftly to Friday's report, calling the 0.1% increase in the unemployment rate a "hammer blow"to the middle class.


More from The Week

16Comments
Aug 3, 2012 4:12PM
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This cracks me up?? Why is this supposed jump in jobs viewed as positive spin. What about the over 600,000 that lost their jobs and what about the fact that unemployment went from 8.2% to 8.3%?? The unemployment keeps going up and more and more people are out of a job ... but the media makes it sound like the country and the morons in Washingtone are doing a good job?? Unbelievable!!

 

Are people seriously that stupid?

Aug 3, 2012 4:07PM
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In total, there were 195,000 fewer Americans employed in July than in June--with 175,000 of those people being women..  And 150 thousand left the labor force entirely while the unemployment rate actually ticked up a tenth of a percent. .  Oh, i guess the reporters missed those parts of the report.

Aug 3, 2012 3:27PM
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I'll chose to track the labor participation rate rather than the phony always revised unemployment rate, thank you.
Aug 3, 2012 2:00PM
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Hey Quackwood,

 

If most households are deocrat or it seems that all polls taken are at least 60% democrat, won't they say that they have jobs and lower the rate?  Drink koolaid, see your job prospects get more miserable and let us make mor money off the so called Obama recovery.

Aug 3, 2012 3:34PM
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what does the jobs report have to do with oil jumping,

(as they said it did) ?

And especially since it did not rise enough to even make the Unemployment rate go down.

But the oil speculators and oil companies jumped the price of oil up ( I think because of Labor day coming soon). 

Aug 3, 2012 6:09PM
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WAKE UP REAL PEOPLE! Almost 200,OOO Americans are out of work since last month! So those on wall street in charge fixate on just new hire numbers, they then raise oil by 5%, inflate the value of the stock markets by 5%, meanwhile the rest of us are either out of work or will be soon while trillions of profit is made by wallstreet! Millions of people are living on the streets while millions of homes stay vacant. Police in Los Angeles shoot unarmed people in the back of the head then shoot at protesters, Police raid wrong apartment killing the sleeping tenant in Florida, Our government takes our tax dollars and kills people overseas! What part of that dont you get? a 3rd grader gets it but most in office dont! 25 YEARS of BUSH and CLINTON is a theocracy! USA is turning so many countries on their heads...At what point is enough enough?
Aug 6, 2012 4:10AM
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If you are reporters, its time you find the honor on being one, and report the whole data, truth and facts so USA citizens know how to respond to the economy events and demand from the Government steps to fallow solutions to get us out of the mess they have not done anything about for so long (International Trade deficit)<>"The U.S. economy lost 1.2 million jobs between June and July. But that’s not how it got reported. When the Bureau of Labor Statistics (BLS) 

 for July, it said the economygained 163,000 jobs. So what gives?"

Aug 3, 2012 4:12PM
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2012 63.7 63.9 63.8 63.6 63.8 63.8 63.7
Bureau of Labor Statistics Labor Participation Rate Jan- July
Aug 3, 2012 3:47PM
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Also note:  "the unemployment rate has been above 8% since his first month in office."

 

This ship was already sinking before the new captain came aboard.

Aug 3, 2012 4:21PM
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Interesting that yes, this an unprecedented streak of high unemployment but we've added millions of jobs... The interesting thought I had today was population size increases. A percentage floats across population size but I think it's much easier to produce a signifcant percentage growth when the population was the size it was during WWII. Now we have way more employable and much more significant issues muddying the jobs growth picture. I agree it's an extreme excuse but we have to employ far more people under much more difficult circumstances. We lost Governement jobs and gained private sector jobs, that's why the market is doing great today. It also shows people are travelling. He plugged the well of extreme losses and turned the ship, slowly and amidst opposition. Mitt's 5 bullet points are things BO is already doing, already has, or are impossible (100% independent energy from the arab world and venezuela) with the exception of the tax increases or cuts. I'm okay with 4 more.
Aug 3, 2012 1:43PM
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The unemployment rate percentage relies on a household survey which means they call households and ask about employment.  What's to stop anti-Obama households from lying so as to hurt Obama's chances of re-election?  The Republicans are dirty-triksters afterall and would easily sacrifice the best interests of the country to come to power.

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