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You are Here: Home > Blog > Unemployment Rate – July 2016

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Unemployment Rate – July 2016

Friday, August 5th, 2016

The job numbers in July showed a huge rebound from the dismal numbers in May, as they did in June. The unemployment rate remained unchanged from June.

According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 217,000 nonfarm job gains in July. Local, state and federal governments netted 38,000 jobs, resulting in 255,000 total net job gains. Economists had expected only around 180,000 total job gains, according to various sources.

The BLS revised job gains for May and June 2016, showing that the economy netted 18,000 more jobs than the BLS had previously estimated. After that revision, job gains have averaged 190,000 per month in the past three months.

The unemployment rate remained steady at 4.9 percent, after edging up from 4.7 to 4.9 percent in June. The rate rose slightly in June and remained steady through July, mostly because more unemployed workers entered or re-entered the job market in both months.

The private sector has now gained nonfarm jobs for 77 consecutive months since the Great Recession. The unemployment rate has dropped 5.1 percentage points from the recessionary high of 10.0 set in October 2009. (More information about the unemployment rate is below.)

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The professional and business services industry continued to trend upward by netting 70,000 jobs in July. The industry has added 550,000 jobs in the past year.

At 43,000, job growth continued in health care as it has for years, even throughout the Great Recession. The industry has netted 477,000 jobs in the past year alone. Much of the industry’s steady job growth over the past few years is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act (“Obamacare”) as well.

Manufacturing, one of the standard measures of labor-market health, gained 9,000 jobs in July. Construction, also a measure of labor-market health, gained 14,000 jobs.

The mining industry continued losing jobs in July (-6,000), again due mostly to lower oil prices. The industry has lost 220,000 jobs since reaching a job-growth peak in September 2014. Most of the job losses are in mining support operations. (See Table B by the BLS for more job numbers listed by industry.)

Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (15.6 percent) followed by Blacks (8.4), Hispanics (5.4), adult men (4.6), adult women (4.3), Whites (4.3) and Asians (3.8, not seasonally adjusted).

Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 2.5 percent unemployment rate in July, the same as in June. Those in the same age group and who don’t have high school diplomas suffered a much higher 6.3 percent rate, though it was significantly down from 7.5 in June. (See Table A-5 by the BLS for more information about the unemployment rate by education level.)

Unemployment Rate 2008 to 2016
Unemployment Rate Chart 2008 to 2016

The unemployment rate has been at 4.9 percent for four of the seven months so far this year. It rose to 5.0 percent in March and April, but then fell to 4.7 in May. Economists consider an unemployment rate of around 5.0 percent to be normal.

In order for the BLS to count workers as unemployed, they must have been actively seeking jobs in the four weeks preceding the count. The number of workers that the BLS counted as unemployed in July was 7.8 million, the same as in June. That’s at least partly why the unemployment rate didn’t change this month.

The count of unemployed workers does not include those who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers in July was 5.9 million, up slightly from 5.8 million in June.

The average workweek for all part-timers and full-timers in the private sector increased by 0.1 to 34.5 hours in July, after remaining steady at 34.4 hours for the past six months. Average hourly earnings increased by 8 cents to $25.69 in July, after increasing by 2 cents in June. Average hourly earnings have risen by 2.6 percent in a year. For private-sector production and nonsupervisory employees, average hourly earnings increased by 7 cents to $21.59, after a 4-cent hourly increase in June.

The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs — at least not for them.

The number of marginally-attached workers in July was 2.0 million, up from 1.8 million in June. Among the marginally-attached, 591,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs. That was up by 89,000 from the 502,000 that the BLS reported in June. (The BLS does not seasonally adjust any of the figures in this paragraph.)

The number of long-term unemployed workers — those who have been without jobs for 27 weeks or longer — was 2.0 million in July, the same as in June. These workers accounted for 26.6 percent of the unemployed. Standard state unemployment benefits last only up to 26 weeks without extensions.

If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.

For more details about the July 2016 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the August 2016 unemployment rate and job numbers on September 2. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.

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Except where otherwise noted, figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.

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