August 1, 2014

Non-farm payrolls grew by 209,000 in July, which was well below June’s upwardly revised increase of 298,000 (previously reported: +288,000). However, this is the sixth consecutive month in which payrolls have increased by more than 200,000, a streak not seen since 1997. The reading undershot market expectations of a 233,000 increase in payrolls.



The private sector was almost entirely responsible for new hiring, having added 198,000 jobs in July. The largest gains were registered in professional and business services, retail, healthcare, as well as in leisure and hospitality, although fewer jobs were created relative to last month. Employment was higher in construction and motor vehicle manufacturing. The public sector added just 11,000 jobs. The U.S. economy has recovered 9.3 million jobs since February 2010, which marked the trough in the labor market crisis. In fact, the economy now has 639,000 more people employed than at the January 2008 peak.



The unemployment rate—derived from a different survey—ticked up from 6.1% in June to 6.2% in July. The reading was above market expectations of the rate holding steady at 6.1%. The labor force participation rate increased slightly from 62.8% to 62.9% as people became more optimistic about employment prospects and reentered the job market.

FocusEconomics Consensus Forecast panelists expect unemployment to average 6.4% this year, which is unchanged from last month’s forecast. For 2015, the panel expects the unemployment rate to drop to 5.8%.