U.S. Economy Adds 209,000 Jobs In July, Unemployment Drops To 4.3 Percent
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There's more evidence today that the American economy is on a solid path. This came in the government's jobs report for July. It shows 209,000 jobs were added to the U.S. economy as the unemployment rate touched a 16-year low. NPR's John Ydstie has more.
JOHN YDSTIE, BYLINE: July job growth exceeded expectations, and the past two months have been well above the monthly average of around 180,000 jobs during the past year. John Silvia, chief economist at Wells Fargo, says he's impressed with the U.S. economy's staying power.
JOHN SILVIA: I am very surprised that it's been as steady as it has with so little major crises.
YDSTIE: In fact, July was the 82nd consecutive month of job gains for the U.S. economy, and the unemployment rate ticked down to 4.3 percent. But economist Beth Ann Bovino of S&P Global says that very low unemployment rate does not count a lot of potential workers still on the sidelines who are currently not in the workforce.
BETH ANN BOVINO: The labor participation rate is so low. People are out of the market. We still have a 38-year low, which is not a positive.
YDSTIE: Actually, the silver lining in that statistic is that there are still potential workers on the sidelines who might be coaxed back into the labor force and help the economy keep growing. And they might be able to find a job in the record number of job openings in the U.S. economy. But Bovino says matching jobs with potential workers can be difficult.
BOVINO: Businesses are saying, well, we can't find the workers. But yet workers are struggling to get the jobs that they want.
YDSTIE: Employers complain workers don't have the right skills, but workers on the sidelines may be reluctant to return to take a job unless they can get wages that make it worth their while. John Silvia says he did see some positive signs on this issue in the July numbers.
SILVIA: So if you look at the labor force participation rates for folks with less than high school or high school degrees, you see that those participation rates are picking up. And so that is a signal that you're bringing in more marginal workers into the labor force.
YDSTIE: Sylvia says getting these less-educated workers back into the workforce is evidence the gains in the economy are broadening out. But, he says, these workers are generally coming in at low wages, so they may be suppressing the average wage gains included in the employment report.
SILVIA: They're getting jobs but at a lower wage. And that's lowering the average earnings numbers.
YDSTIE: And today's report showed the average hourly earnings rising just 2 and a half percent over the past year. Economists say at this point in an economic recovery, that number should be closer to 3 and a half percent. But there was a glimmer of hope on that front in today's report, too. Average hourly earnings rose three-tenths of a percent last month. If that continued, earnings growth would get to more normal levels over the next year. John Ydstie, NPR News, Washington.
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