US labour market sheds jobs in July as labour force participation slumps
US labour market loses 23,000 jobs in July as education, government and retail sectors record significant declines The United States labour market lost 23,000 jobs
US labour market loses 23,000 jobs in July as education, government and retail sectors record significant declines The United States labour market lost 23,000 jobs in July, with major declines across several sectors, including education, government and retail trade. On Friday, the Bureau of Labor Statistics released its latest jobs report, which showed that the unemployment rate fell to 4.1 percent from 4.2 percent. Part of that dip, however, was driven by a decline in labour force participation, the percentage of people working or actively looking for work. Labour force participation fell to 61.4 percent, its lowest level in five years. Excluding the economic impacts of the COVID-19 pandemic, the labour force participation rate is at its lowest level in five decades. Some 264,000 people left the labour force, meaning they are no longer working or looking for work. The retail trade sector lost 19,000 jobs overall. Warehouse clubs and big-box retailers were hit the hardest, shedding 21,000 jobs, while petrol stations cut another 5,000.
Those losses were partly offset by gains at stores selling more specialised goods, such as music and sporting goods stores, which added 10,000 jobs. During the height of the normally busy summer travel season, the US economy also lost jobs in leisure and hospitality. The sector shed 40,000 jobs, with food services accounting for 26,000 of those losses. The biggest losses came in government, which shed 53,000 jobs overall. Most of those cuts were in local education, which lost 49,000 jobs. There were gains in healthcare, with the sector adding 22,000 jobs. Most of those gains were concentrated in ambulatory healthcare services, which added 18,000 jobs. June’s jobs numbers were also revised in the latest report, with the month now showing a downwardly revised gain of 20,000 jobs. The latest jobs report comes amid a so-called “low-hire, low-fire” environment, which essentially means that people who have jobs are not leaving them in large numbers to take new positions.
The number of job openings dropped slightly from 7.5 million to 7.4 million in May, while hiring remained unchanged at 5.3 million, according to the Job Openings and Labor Turnover Summary report from the Bureau of Labor Statistics published on Tuesday. Experts say the recent reports suggest an economic slump, contributing to low confidence among American consumers. “There’s no sugar coating the overarching message in the July jobs report – the economy is struggling,” Mark Zandi, the chief economist at Moody’s Analytics, a financial services firm, wrote on social media. Zandi pointed to the slumping labour force participation rate as a “clear tell” of an ailing job market. “While unemployment is low, that’s only because those losing their jobs are leaving the workforce, too discouraged to look for a job, as few businesses are hiring,” he explained. With wage growth being outpaced by the pace of inflation, Zandi added, “no wonder most Americans say they are upset about their finances and the economy’s performance”.
The BriefWire