2:01pm

Fri August 1, 2014
Economy

In July Jobs Numbers, Fodder For Cautious Optimism

Originally published on Mon August 25, 2014 12:33 pm

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Transcript

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Not as good as June but above 200,000 - that's the short story of job growth in July. Today, the government's monthly report showed that 209,000 jobs were added in the last month. We're going to talk about employment and unemployment with the Secretary Of Labor, Tom Perez but first, NPR's John Ydstie explains the numbers.

JOHN YDSTIE, BYLINE: The unemployment rate rose a 10th of a percent to 6.2 percent in July, but not because the economy was losing jobs rather, says economist Doug Handler it's because more people came back into the labor force looking for work.

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DOUG HANDLER: The economy is strong enough to bring people back into the labor force looking for jobs. That's a good thing.

YDSTIE: As for job growth in July, Handler of IHS Global Insight says it was good - though not a blockbuster like the June number which was revised up to nearly 300,000. But Jason Furman, head of the President's Council Of Economic Advisers says the July gains continue the significant progress that's been made in recent months.

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JASON FURMAN: We've now seen six straight months of employment growth of 200,000 jobs or more. That's the first time we've seen job gains at that pace since 1997.

YDSTIE: Dean Baker of the Center For Economic Policy And Research says the July performance adding 209,000 jobs is pretty good. But he says it's way below the nearly 280,000 average rate for the previous three months.

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HANDLER: So it's considerably slower but it's not a bad rate. The only caution I make is that given how many jobs we have still to makeup not a great number.

YDSTIE: Indeed, five years into the economic recovery there are still 9.7 million Americans looking for a job and can't find one. There are another seven and half million Americans with part-time work who would like to be full-time. And average wage growth has barely kept pace with inflation. Doug Handler says one encouraging thing in the July report was that job creation was broad-based across sectors. He's particularly encouraged by the addition of 58,000 new jobs in the goods producing industries - mining, manufacturing, and construction.

HANDLER: Manufacturing and construction were sectors that have been lagging in some of the recent months here so we are hopeful that that is beginning of a positive trend.

YDSTIE: Lots of economists and investors were looking closely at wage growth in this report. After data released yesterday showed worker compensation up sharply in the second quarter. There was concern more rapidly rising wages could prompt the Fed to hike interest rates sooner than planned. But Handlers says there was no wage acceleration in this report.

HANDLER: There's no real new news for the Fed to act on based on the data here.

YDSTIE: Yesterday, the stock market sold off sharply amid these fears. The decline continued today but was less severe. John Ydstie, NPR news, Washington. Transcript provided by NPR, Copyright NPR.