Job growth disappoints

The labor department reported slowing job growth in July, down to a seasonally adjusted rate of 92,000 as employment gains in various service industries were offset by losses in manufacturing, construction, and government.

Contrary to the pattern established over the last year, data for the two prior months were revised downward, falling from 190,000 to 188,000 in May and from 132,000 to 126,000 in June. On a year-over-year basis, the labor force gained 1.4 percent, matching the three-year lows of earlier this year.

The unemployment rated ticked up one-tenth of a percent to 4.6 and average hourly earnings increased 0.3 percent to $17.45, up 3.9 percent from year-ago levels, indicative of very little wage pressure.

The generally good health of the labor market was echoed in yesterday's measure of consumer confidence where individuals continue to express little concern regarding the availability of jobs, however, the current trend in job growth points to trouble ahead.

By major category, growth was once again led by education and health care services, however, the financial activities category posted solid gains led by an 11,000 gain in credit intermediation and related activities, perhaps a byproduct of the increasing tumult in credit markets and the related home foreclosures and bankruptcies.

Computer systems design in the professional and business services category posted an impressive gain of 14,800 positions and the always reliable restaurant and bar employment in the leisure and hospitality category added 22,200 new spots.


Declines in construction employment were dispersed between residential and nonresidential building with, surprisingly, nonresidential work declining more than residential work. A total of 1,600 residential construction jobs were lost while employment related to public and government buildings declined by 8,200.

As an indication that the home improvement boom has not completely stopped, residential specialty trade contractors gained 2,600 positions while homebuilders let go 4,200 workers, however, as has been the case over the last year or so, there are an unknown number of illegal workers that do now show up in the BLS data who are now out looking for work.