The stealth boom
in the U.S. job market continues. Payroll employment grew by
207,000 in July-a robust number that is roughly double the pace
necessary to maintain full employment-but the surprise comes
from revisions made to past months' numbers.
It works like
this: the monthly Employment Situation report from the Labor
Department includes hundreds of data series, and many of those are
preliminary. In the case of the flagship number that most
newspapers trumpet ("non-farm employment growth" from the
establishment payroll survey), the report also includes a revision
for the previous two months. Indeed, June and May figures were
revised up by 20,000 and 22,000 jobs respectively. This means that
yes, the current job news is good, but the revised news is even
better.
Highlights from the
Employment Report for July
- 5.0 percent
unemployment rate
- 207,000 new
payroll jobs
- 438,000 new total
jobs
- 450,000 more
people in the labor force
- Over the last
year, 2.2 million new payroll jobs have been created
- Over the last
year, 2.4 million new jobs have been created, in total
When the 2001
recession hit the U.S. economy, the total number of employed
Americans dropped by 2 million over the course of the year,
according to the BLS household survey, while the size of the labor
force remained steady. But since the beginning of 2002, total
employment has grown by over 6 million, which matches the nearly 6
million net new members of the U.S. labor force. (See Chart 1.)
Even so, some
observers of the current economic scene worry that job creation is
not keeping up with the growth in the population of new job
seekers. That is, are U.S. companies and governments creating
enough new jobs for all of the young people entering the labor
force from high school and college? The answer is yes. The economy
produced an average of 179,000 jobs per month over the last year,
whereas the number of 20-54 year olds has grown by 77,000 a month
in recent years, according to Census estimates. Older cohorts have
grown even more, but they have lower workforce participation rates,
which is the gist of the analysis by Federal Reserve economist
Julie Hotchkiss.
This kind of
strong employment situation really takes the hot air out of the
sails of economic pessimists. Is this what all the supposed dangers
of outsourcing, free trade, higher oil prices, a jittery dollar,
and deficits add up to: a low unemployment rate and rapid job
growth? There aren't many clouds on the economic horizon right now.
Then again, that means there's very little excuse for bloated
highway bills and other government excesses.