Today’s Employment Situation Report released by the Bureau of Labor Statistics shows the addition of 162,000 jobs in July and a 26,000 downward revision to earlier months’ data. The unemployment rate dropped from 7.6 percent to 7.4 percent, but this was largely due to workers dropping out of the labor force because of weak job opportunities. The labor force participation rate decreased to 63.4 percent, near its low of the downturn (63.3 percent in April 2013). Today’s numbers bring the average monthly growth rate of the last three months to 175,000. If that rate continues, it would take six years to fill the gap of 8.3 million jobs and return to a healthy labor market.
In her analysis, EPI economist Heidi Shierholz stresses that almost every major indicator in the report underscores that we have not yet entered a robust jobs recovery. Shierholz looks at six trends in the labor market that are a direct result of sluggish hiring, namely:
- Unemployment is elevated across the board—across all categories of education, age, gender, race/ethnicity, and occupation.
- Labor force participation itself is depressed.
- Underemployment is elevated.
- Long-term unemployment is elevated.
- Wage growth is depressed.
- There is disproportionate job growth in low-wage industries.
Shierholz examines each trend in turn, looking at how weak hiring contributes to an unhealthy labor market.