After a lackluster first half of 2016, the second half shows promise: July marked the second straight impressive month for employment growth. The Bureau of Labor Statistics reported that 255,000 jobs were added in July, while May and June received additional revisions of 18,000 more jobs combined between the two.
Lowdown on the economy
Up until last month many economic analysts were bearish on the jobs situation in the U.S. Once the decision for Brexit came through, skepticism grew as the pound fell. Uncertainty overseas contributed to a gloomy outlook on what was yet to come, considering the new hire numbers were the worst the U.S. had seen since 2007, per BLS data.
"July saw 255,000 jobs added to the economy."
But, two consecutive months of gains topping 250,000 has swayed analysts judgment for the better, according to The New York Times. This has yet to affect the unemployment rate, which sits steady at 4.9 percent.
"This is a validator," Michael Gapen, chief United States economist at Barclays, told the Times. "This is a report that indicates that the slowdown in hiring earlier in the year has been reversed."
In other good news, wage growth continued its upward trend, notching another $0.08 to bring the average hourly wage in the U.S. to $25.69. According to The Wall Street Journal, this represents a 2.6 percent year-over-year increase. While this is certainly a good sign, analysts have pointed out this is a full percentage point lower than the developments made before the Great Recession, which shows the economy hasn't quite caught up with growth.
"Over the last several years coming out of the recession, we have seen advancements in technologies create new competition, disrupting established markets," says Jennifer Pritchard, Business Development Manager for Beacon Hill's Technologies Division in Des Moines. "This has forced clients to move away from archaic systems and processes and rely on new ways of doing things better, faster, smarter. Specific to the IT space, that has led to a proliferation of opportunities for individuals with unique IT skill sets."
Though the Federal Reserve hasn't raised the benchmark interest rate in recent months due to concerns over instability, recent employment figures are signaling an end to that streak. NBCNews reported it's very likely a decision for the rate hike will come in September, but did concede a portion of economists are holding out for no interest rate raise until the end of 2016.
Spotting the growth
Gains last month mimicked much of where the past few months have seen growth:
- Professional and business services had its best performing month in 2016, adding 70,000 jobs to the economy. This brings its year-over-year growth to 550,000, according to the BLS. Its biggest gains were found in professional and technical services as well as computer systems design, which generated 37,000 and 8,000 opportunities, respectively.
- Health care employment continues to rise steadily each month and contributed 43,000 jobs last month, bringing its year-over-year total to 477,000. Gains continue to emerge in ambulatory services and hospitals, which added 19,000 and 17,000 jobs, respectively.
- Leisure and hospitality for the most part has been steadily growing in 2016, though took a larger-than-usual jump and hired 45,000 in July.
- Financial activities had a down month, hiring just 18,000. This brings its year-over-year total to only 162,000.
- Government employment surprised analysts and added 38,000 jobs to the economy in July.
- Employment decreased in mining by 6,000, while manufacturing, construction, retail and the information industry all had no noticeable gains.
July comes as a relief after a stark May had investors and economists worried about the condition of the U.S. jobs market. It's clear that everything is back on track, though analysts expect the hiring to slow down over the next few months. Despite this, there should still be noticeable gains moving toward 2017, with wage growth hopefully gaining traction as well.
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