July 2006 Employment Situation

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

Total nonfarm payroll employment increased by 113,000 in July, and the unemployment rate rose to 4.8 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job gains occurred in several service- providing industries, including professional and business services, health care, and food services. Employment also rose in mining. Average hourly earnings rose by 7 cents, or 0.4 percent, in July.

Unemployment (Household Survey Data)

The number of unemployed persons edged up to 7.2 million in July, and the unemployment rate rose to 4.8 percent. A year earlier, the number of unemployed persons was 7.5 million and the jobless rate was 5.0 percent.

Over the month, the unemployment rates for most major worker groups--adult women (4.2 percent), teenagers (15.5 percent), whites (4.1 percent), blacks (9.5 percent), and Hispanics (5.3 percent)--showed little or no change. After declining in June, the jobless rate for adult men increased to 4.2 percent in July. The unemployment rate for Asians was 2.7 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Following a decline in June, the number of long-term unemployed persons--those unemployed 27 weeks or longer--returned to its May level of 1.3 million. These long-term unemployed accounted for 18.6 percent of total unemployment, about the same as in May. (See table A-9.)

After trending down for several months, the number of unemployed persons who were reentrants to the labor force increased to 2.4 million in July. This group accounted for 32.7 percent of total unemployment, up from 30.0 percent in June. (See table A-8.)

Total Employment and the Labor Force (Household Survey Data)

Both total employment (144.3 million) and the employment-population ratio (63.0 percent) were essentially unchanged in July. The labor force participa- tion rate held at 66.2 percent. (See table A-1.)

Persons Not in the Labor Force (Household Survey Data)

About 1.5 million persons (not seasonally adjusted) were marginally at- tached to the labor force in July, the same as a year earlier. These indivi- duals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 428,000 discouraged workers in July, also about the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 1.1 million marginally attached had not searched for work for reasons such as school attendance or family responsibilities. (See table A-13.)

(Numbers in thousands, not seasonally adjusted)

1 Represents persons in the civilian noninstitutional population age 16 and over who resided in households that were eligible to be selected for the Current Population Survey (CPS). These data are not representative of the total evacuee population because they do not in- clude children or people residing in shelters, hotels, places of worship, or other units outside the scope of the CPS. The total number of evac- uees estimated from the CPS may change from month to month as people move in and out of the scope of the survey and because of sampling and nonsampling error. NOTE: These data use population controls that have been adjusted to account for interstate moves by evacuees.

Employment Status of Hurricane Katrina Evacuees (Household Survey Data)

Beginning in October 2005, questions were added to the household survey to identify persons who evacuated from their homes, even temporarily, due to Hurricane Katrina. Data collected through these questions do not account for all evacuees; persons living outside the scope of the survey--such as those living in hotels or shelters--are not included. The questions were asked of persons in the household survey sample throughout the country, since some evacuees relocated far from the storm-affected areas. An additional question determined whether evacuees had returned to their homes and were residing there at the time of the July survey. The total number of evacuees estimated from the household survey may change from month to month as people move in and out of the scope of the survey; also, because the estimates are obtained from a sample sur- vey, they may vary from month to month due to sampling and nonsampling error.

Information gathered in July represented 1.1 million persons age 16 and over who had evacuated from where they were living in August 2005 due to Hurricane Katrina. These evacuees either had moved back to their homes or were living in other residential units covered in the survey. About 6 in 10 of the evacuees were living in their August 2005 residences. Of all evacuees identified, 59.3 percent were in the labor force in July. The unemployment rate for persons identified as evacuees was 11.9 percent. The rate was much higher for evacuees who were not living in their former homes (23.0 percent) than for those who were again living in their pre-Katrina residences (4.2 per- cent). (See table B.)

Industry Payroll Employment (Establishment Survey Data)

Total nonfarm payroll employment rose by 113,000 in July to 135.4 million. This increase was in line with the average monthly gain for the prior 3 months (112,000) but was well below the average monthly gain for the 12 months ending in March (169,000). In July, job growth continued in professional and business services, health care, food services, and mining. (See table B-1.)

Employment in professional and business services continued to grow in July (+43,000). Within the industry, job gains occurred in computer systems design (+12,000), architectural and engineering services (+10,000), and management and technical consulting (+6,000). Temporary help services employment remained flat over the month and has shown little net change since January.

Health care employment rose by 23,000 in July. Nursing and residential care facilities, along with hospitals, continued to add jobs. Over the past 12 months, health care employment has grown by 274,000.

In leisure and hospitality, food services and drinking places employment grew by 29,000 in July. Over the year, food services has added 229,000 jobs.

Elsewhere in the service-providing sector, employment in wholesale trade was flat in July; this industry added an average of 11,000 jobs per month from January through June. Employment in retail trade was unchanged in July. General merchan- dise stores lost 8,000 jobs over the month; employment in the industry has declined by 74,000 since August 2005. Financial activities had little employment growth for the third month in a row.

In the goods-producing sector, mining employment grew by 8,000 in July. The industry has added 123,000 jobs since its most recent low in April 2003, largely reflecting gains in support activities for oil and gas. In July, construction employment was little changed for the fifth consecutive month.

Manufacturing employment edged down in July (-15,000); the decrease largely offset a gain in June. In July, job losses in transportation equipment (-9,000), computer and electronic products (-8,000), and textile mills (-2,000) more than offset employment increases in machinery (+8,000) and chemicals (+4,000).

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls remained unchanged at 33.9 hours in July, seasonally adjusted. The manufacturing workweek rose by 0.2 hour to 41.5 hours, while factory over- time was down by 0.1 hour to 4.5 hours. (See table B-2.)

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls increased by 0.1 percent in July to 105.2 (2002=100). The manufacturing index rose by 0.4 percent to 97.3. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls rose by 7 cents, or 0.4 percent, in July to $16.76, season- ally adjusted. Average weekly earnings also increased by 0.4 percent in July to $568.16. Over the year, average hourly earnings increased by 3.8 percent, and average weekly earnings increased by 4.1 percent. (See table B-3.)