Hiring Heats Up in July

The labor market surged again in July with 943,000 new jobs created, the Bureau of Labor Statistics reported Friday.

The BLS also revised May and June job data upward, bringing the three-month average to 832,000 new jobs created. 

Mortgage Bankers Association Senior Vice President and Chief Economist Mike Fratantoni called July a solid month of hiring. “Beyond the payroll data, the household survey showed employment up by more than one million in July as the number of unemployed fell and more people returned to the labor force, ” he said. “Although there are concerns regarding the impact of the delta variant, these data show an economy that was continuing to recover in July. “

Fratantoni said the unemployment rate dropped by half a point, including a 560,000-person decline in the long-term unemployed. “The curtailment of enhanced unemployment insurance benefits in some states likely encouraged some of this decline,” he said, noting MBA forecasts the unemployment rate will drop to 4.5% by the end of the year.

First American Deputy Chief Economist Odeta Kushi said the solid jobs report signals ongoing recovery. She noted residential construction jobs have now surpassed pre-COVID levels.

“Nearly three-quarters of the jobs lost at the start of the pandemic have been recouped,” Kushi said. “At this monthly pace, we would return to the pre-COVID employment peak by February 2022.”

Wells Fargo Economics called the news a big step down the road toward the ‘substantial further progress’ the Federal Reserve’s Open Market Committee has said it seeks.

Fratantoni said construction employment increased by 11,000, with most of the strength in residential building. “This bodes well for increased homebuilding, which the housing market desperately needs given the lack of inventory,” he said.

The BLS reported average hourly earnings were up by 4% year-over-year. Fratantoni said this is another sign employers are struggling to attract workers for the record number of job openings they have.