U.S. labor update: Payrolls up, jobless rate down

United States payrolls increased, and the unemployment rate edged down in July as the two measures of the labor market returned to pre-pandemic levels.

Nonfarm payrolls increased 528,000 and the jobless rate retreated a tenth of a point to 3.5 percent, according to the latest Bureau of Labor Statistics estimates.

The monthly payroll increase was the largest since the addition of 714,000 jobs in February and exceeds the average monthly gain of 388,000 jobs over the past four months. 

Total nonfarm employment has increased 22 million since reaching a low in April 2020. Private sector employment is 629,000 higher now than in February 2020 and the onset of the COVID-19 pandemic in the U.S.

The unemployment rate similarly returned to its level in February 2020.

Payroll gains for the previous two months were revised upward a total of 28,000 to 398,000 for June and 386,000 for May.

For July, 5.7 million people were counted among those unsuccessfully looking for work. Of those, 1.1 million have been out of work 27 weeks or longer. Another 3.9 million people were counted among those working part-time because their hours were cut or they were unable to find full-time positions.

The labor participation rate — the portion of the population working or looking for work — edged down a tenth of a point to 62.1 percent. That remains below the 63.4 percent level in February 2022.

Payroll gains for July were spread out among industry sectors. 

Employment increased 96,000 in leisure and hospitality, although the sector has yet to regain all the jobs lost in the aftermath of the pandemic and related restrictions.

Employment increased 89,000 in business and professional services, 70,000 in health care and 57,000 in government. Payrolls grew 32,000 in construction, 30,000 in manufacturing  and 22,000 in retail trades.

The average workweek for employees on private, nonfarm payrolls remained unchanged at 34.6 hours for a fifth consecutive month. The average manufacturing workweek held steady at 40.4 hours.

Average hourly earnings for employees on private, nonfarm payrolls increased 15 cents to $32.27. Over the past year, hourly earnings have increased 5.2 percent.