U.S. Employers Added 943,000 Jobs in July

U.S. employers added 943,000 jobs in July, the biggest monthly job gains since August of 2020, as more Americans went back to work last month amid the broader reopening of the economy. The unemployment rate fell to 5.4% from 5.9% in June, and the number of unemployed persons fell by 782,000 to 8.7 million, according to the Department of Labor (DOL).

The number of Americans on temporary layoff fell by 572,000 to 1.2 million in July. This measure has fallen considerably from the high of 18 million in April 2020 but is 489,000 above the February 2020 level. The number of permanent job losses declined by 257,000 to 2.9 million in July, but is still 1.6 million higher than in February of 2020.

The labor force participation rate remained stubbornly low at 61.7% in July. It has stayed within a narrow range of 61.4% to 61.7% since June 2020, according to the DOL, and is 1.6% lower than in February 2020. Average hourly earnings for all employees on private nonfarm payrolls increased by $0.11 to $30.54, following similar increases in wages over the past three months.

Where the Job Gains Are

The job gains in July were led by the leisure and hospitality sector, which was the hardest hit during the pandemic. 380,000 jobs were added in that sector, with two-thirds of those gains coming from hiring in food services and drinking venues. 74,000 jobs were added in accommodation, while 53,000 jobs were added in arts, entertainment and recreation. Despite these gains, employment in the leisure and hospitality sector is still 10.3% lower than in February of 2020, or 10.3 million jobs short of pre-pandemic figures. With a resurgence in COVID-19 cases and new mask mandates, additional gains in the sector could be muted for several months.

Unemployment across race continues to illustrate an uneven recovery, although July's release did reveal some improvement in joblessness for Black workers and women. The unemployment rate for women declined from 5% to 4.5%, and fell from 9.2% to 8.2% for Black workers.

In addition to July's robust job gains, the DOL revised its June and May 2021 numbers to reflect more jobs added. May's total was raised by 31,000, from 583,000 to 614,00, while June's was increased by 88,000, from 850,000 to 938,000.