Prior to the release of the monthly Employment Situation Summary, economists polled by Reuters predicted the addition of 190,000 jobs to non-farm payrolls. The actual tally for July was 157,000 jobs, per the Department of Labor. May and June’s numbers were revised upward to reflect an additional 59,000 jobs.
Unemployment declined slightly to 3.9 percent from 4 percent in June, while average hourly wages increased by 7 cents to $27.05.
Year over year, however, wages have increased only 2.7 percent, according to the Bureau of Labor Statistics. The PayScale Index, which tracks the change in wages for employed U.S. workers, shows that real wages – the buying power of workers’ pay with inflation taken into account – have declined 9.3 percent since 2006.
“People keep wondering when that magical kink will occur and wages will turn on a dime,” said Ellen Zentner, chief United States economist at Morgan Stanley, speaking with The New York Times. Her prediction? Not yet. Labor shortages are “not economywide,” she said.
Other economists have suggested that the decline in union membership – as well as other factors – have decreased workers’ bargaining power and thus their ability to demand higher wages.
Where Jobs Are Growing
A few industries were responsible for most job gains last month. Professional and business services added 51,000 jobs, while healthcare added 34,000 jobs and food services and drinking places tallied 26,000 jobs. On the goods-producing side, manufacturing added 37,000 jobs and construction added 19,000 jobs.
Other industries were little changed for the month, including mining, wholesale trade, transportation and warehousing, information, financial activities and government.
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