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After several months of sluggish job gains, Friday’s jobs report finally delivered. Over the prior two months, the biggest improvement was seen with those who’d not been counted by the base unemployment rate. Last month’s storyline was certainly about the headline numbers. That’s because nearly a million people went back to work despite the summer surge of COVID-19 cases. It’s evident that the 26 states including Florida, which dropped the extended unemployment benefits in June, had a profound impact putting people back to work in July.
That’s encouraging news going forward as well. As for a few headline numbers, the unemployment rate is now at 5.4%. Over 943,000 jobs were added and the positive revisions from previous months total 119,000 jobs. The positive revisions from prior months were huge and they also provided a net of more than 1 million jobs added and accounted for in July.
The reported base rate and the real unemployment rate are two separate things. The real unemployment rate once underemployed, long-term unemployed, and marginally attached people are accounted for is actually 9.2%.
The real unemployment rate dropped by a bigger percentage than the base rate indicating across the board progress within the labor market. There are currently 9.8 million people who are long-term unemployed, underemployed, or marginally attached to the workforce which makes up the difference between the base rate and the real rate. That’s an improvement of 600,000 over the prior month.
As for Demographics, unemployment rates fell for all demographics except Asians and the average hourly wage rose by 11 cents per hour during the month to $30.54. The average full-time income is currently $55,265 an increase of $411 over the prior month.
The near across-the-board demographic progress, the size of the job's gains, along with strong wage gains are all extremely encouraging. It’s about as good of a report as we could hope for. This does point to a likely continued trend of inflation pressures. However, that’s something we’ll have to reconcile for sooner than perhaps some think we will. July proved to be an outstanding month for employment and there’s reason to remain optimistic going forward as well.