Private-Sector Job Creation Accelerates In July

Today’s jobs report isn’t great, but it’s better. For the moment, that’s good news–great news, if you consider the alternative outcome implied by yesterday’s steep market loss. Private-sector payrolls rose by 154,000 in July, nearly double June’s revised 80,000 gain. Although government jobs overall decreased 37,000 last month, the momentum in the private sector was enough to bring the unemployment rate down ever so slightly to 9.1%. In short, we dodged another bullet. There are still plenty of challenges ahead, as there have been all along, but today’s payrolls report for the private sector is strong enough to keep the recession risk at bay, if only on the margins and just long enough until the next data point arrives.

Last month’s net gain in private-sector jobs was the highest since April’s 241,000 rise. We’re still well below that figure, but it’s also obvious that we’re comfortably above the below-100k reports for May and June. Is the two-month slump over? Hard to say, and there are lots of reasons for staying skeptical. It’s still going to take time to figure out how much the economy has slowed, and what it implies for the fall. But at least today’s update extends the rationale for optimism, albeit an optimism that’s simply looking for evidence that there’s no recession lurking around the next bend.

“While I do not think this sounds the all-clear signal, it does quell some of the conversation that the U.S. is falling back into a recession, says Tom Porcelli, chief U.S. economist at RBC Capital Markets. “There are still plenty of headwinds, like Europe. This report pulls us back from the ledge a little bit.”

About James Picerno 894 Articles

James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers.

Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg, Dow Jones, Reuters.

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1 Comment on Private-Sector Job Creation Accelerates In July

  1. if u believe this economy is creating 117k jobs a month, i got some prime beach front property to show you in downtown phoenix.smells like some huge revisions a comin.

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