The real unemployment rate – July 2019 

The real unemployment rate – July 2019 

Bottom Line: There’s a lot more to the employment report than just a couple of headline numbers. The last several months has proved the value of not overreacting to any one employment report. Especially when we’re already at the lowest unemployment rate in 50 years. Weaker reports might mean that hiring is really slacking off, or it might mean that the labor market is so tight it’s hard for employers to hire when they’re looking to do so. Throughout the first half of 2019, it’s without a doubt been the later. Friday’s employment report wrapping up the first half of the year proved it once again after the lackluster May report. 

  • Headline unemployment rate 3.7% - (up .1%)
  • +224,000 jobs 
  • Negative revisions from past months totaling -11,000 jobs for a net number of +213,000

Top industries for hiring:              

  • #1 Professional & Business Services     
  • #2 Healthcare
  • #3 Transportation & warehousing

Important takeaways:

  • Unemployment rate ticked up to do more discouraged workers entering the market
  • Super strong month for growth – especially at this point in the cycle
  • Resurgence in manufacturing and construction hiring confirms the economy is still rolling merrily along

Now for the real unemployment rate once underemployed, long-term unemployed and marginally attached people are accounted for:              

  • Actual: 7.2% down from 7.8% yoy

Other takeaways:                

1. The real-unemployment rate ticked higher but there are only five months in recorded American history with a lower real unemployment rate.

2. Those unaccounted for in the base unemployment rate include 7.3 million Americans (1.4 million long-term unemployed, 4.3 million are underemployed & 1.6 million are marginally attached to the workforce). 

3. The labor participation rate improved to 62.9% 

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