U.S. nonfarm payrolls rose in the month of July by 1.76 million, coming above consensus expectations of 1.48 million. July payrolls remained 12.9 million positions below their pre-Covid February level. The jobless rate also rebounded further in July, dropping to 10.2 percent from June’s 11.1 percent, as the number of unemployed persons dropped 1.4 million to 16.3 million.
The biggest job gains were seen in leisure and hospitality, retail trade, professional and business services, other services, and health care. Government hiring was also solid, but this was because of the unusual hiring patterns in local government education hiring because of the pandemic, which led to a 215k gain in July.
Other significant sectors recorded modest job gains. Manufacturing sector saw a rise of 26k, while finance and transportation recorded a rise of 38k. Construction recorded a job rise of 20k. The mining sector continued to shed jobs in July.
People on temporary layoff dropped 1.3 million in July to 9.2 0illion, as people were called back to work. On the contrary, the number of people on permanent layoff was virtually unchanged at 2.9 million.
“Given the loss in momentum in the high-frequency labor market indicators in July, job gains held up better than expected. However, the pace or rehiring has slowed from May and June. All told, the U.S. economy has now recouped 9.3 million of the 22.2 million jobs lost in March and April, or about 42 percent”, said TD Economics in a research report.
