July Jobs Up Nearly 2 Million; Unemployment Rate Drops

The Bureau of Labor Statistics reported nonfarm payroll employment increased by 1.8 million during July, pushing the unemployment rate down to 10.2 percent.

MBA Senior Vice President and Chief Economist Mike Fratantoni noted the pace of job growth slowed in July, but called the gains over the past three months “an impressive rebound during the ongoing economic challenges brought forth by the pandemic.” Nonfarm payrolls increased by 4.8 million in June.

Although 9.2 million people remain temporarily unemployed, another 1.3 million workers have been called back to work, and the number of permanent layoffs remained steady at 2.9 million, noted Fratantoni.

“The unemployment rate declined in July, but at 10.2 percent, this is still higher than the peak during the Great Recession,” Fratantoni said. He said broader underemployment measures such as the BLS’s U6 unemployment rate, which also tracks people “marginally attached to” the labor force and people who are employed part-time for economic reasons, have fallen even faster, but remain high at 16.5 percent of workers either unemployed or underemployed.

“MBA’s Weekly Application Survey continues to show robust demand for home sales, and record-low mortgage rates are fueling an ongoing refinance wave,” Fratantoni said. “The jobs report should continue to support both: the return of jobs will keep housing demand strong and the high level of unemployment ensures that the Federal Reserve will keep rates at zero–meaning mortgage rates will stay low for an extended period.”

Doug Duncan, Chief Economist with Fannie Mae, Washington, D.C., called July’s employment growth “robust,” but called the deceleration from June’s figure consistent with other indicators showing the labor market’s pace of improvement has slowed. “The labor force participation rate, which had rebounded of late, fell slightly this month,” he said.

Duncan said 27,000 workers were hired for the decennial Census, which lowered the unemployment rate. “However, given the pandemic, total census hiring will be much lower than originally planned and census-taking activities will end sooner,” he said.