The labor market begins the second half of 2013 with a fizzle, with the Employment Situation Report released by the Bureau of Labor Statistics showing the addition of just 162,000 jobs in July and a downward revision to earlier months’ data that brings the average growth rate of the last three months to 176,000. As we have said before, this rate of growth is painfully slow. At this rate, it would take six years to fill our 8.3 million jobs gap and get back to health in the labor market.
The unemployment rate dropped from 7.6 percent to 7.4 percent, in part due to workers dropping out of the labor force. The labor force participation rate dropped to 63.4 percent, near its lowest point of the downturn (which was 63.3 percent in April). The share of the working-age population with a job did not budge, holding steady at 58.7 percent.
A weak labor market doesn’t just affect Americans looking for work—it means lower wages for those with jobs. Because hiring remains so sluggish, the following six things are happening in the labor market:
- 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.
See our analysis later today for a more in-depth look at each of these six trends, or call for comment.