Donald Trump is running for president on the idea that the American economy is stuck in a deep hole, and only he can get it out. The job-market data keeps saying otherwise.
U.S. employers added 255,000 jobs in July — significantly more than economists had forecast — and job growth in May and June was stronger than initially reported, the Bureau of Labor Statistics said Friday. Wage growth accelerated, drawing more Americans back into the job market, and the unemployment rate held steady at 4.9 percent.
Last month, I wrote that the economy will probably look pretty good on Election Day. Friday’s report makes that a near-certainty, at least as far as the job market is concerned. With just three more reports to go until voters head to the polls — October’s jobs numbers will be released four days before Election Day — it would require a historic collapse for the unemployment rate to be much above 5 percent in November.
“Pretty good” is relative, of course. The job-market recovery has been long — employers have added jobs for a record 70 consecutive months — but it hasn’t been particularly strong by historical standards. Wage growth has been weak. The share of Americans in the labor force is near a four-decade low. Millions of people are working part-time because they can’t find full-time jobs. All those measures have improved a bit in recent months, but they show an economy that is still recovering from the recession that officially ended more than seven years ago.
But Friday’s report suggests the recovery is beginning to reach some of the groups that have struggled most in recent years. The unemployment rate for workers without a high school diploma fell sharply to 6.3 percent in July, lower than it was when the recession began. (Their unemployment rate topped 15 percent in the recession.) For workers with only a high school diploma, the unemployment rate is down to 5 percent from more than 10 percent during the recession.
None of that is likely to stop Trump from talking about the weak economy — or from outright claiming the numbers are manipulated. And there is plenty of reason to worry about the path of the economy, starting with this week’s weak estimate of second-quarter economic growth. But the job market, at least, appears to be on firm footing.
Back on track: The BLS revised up its estimate of May job growth to 24,000 from 11,000. That’s still pretty lousy, even factoring in the roughly 35,000 Verizon workers who were on strike that month and therefore weren’t counted in the payroll numbers. But May increasingly looks like a one-time blip rather than a more serious slowdown. Employers have added an average of 190,000 jobs per month over the past three months, a somewhat slower pace than late last year but still generally healthy. The longer-run rate of job growth has also been slowing gradually; over the past year, the U.S. has added 2.4 million jobs.
A growing labor force: More than 400,000 Americans joined or re-joined the labor force in July, and the participation rate — the share of adults either working or actively looking for work — rose for the second month in a row. The participation rate has bounced around lately, rising late last year and early this year, then dropping in the spring before rebounding in the past two months. But beneath the month-to-month volatility, it looks like the improving job market is gradually beginning to draw more Americans off the economy’s sidelines.
Good jobs: The fastest-growing sector in July was professional and business services — a generally high-paying category that includes lawyers, architects and many office workers. And while retailers, restaurants and other low-wage industries also added jobs, the U.S. has in recent months seen solid growth in “good jobs” — full-time jobs that offer a decent wage. Average hourly earnings rose 8 cents an hour in July and are up 2.6 percent over the past year, significantly ahead of inflation. And the number of Americans working part-time because they can’t find full-time work is falling again after an unexpected spike in the spring. (The number of such so-called involuntary part-time workers ticked up slightly in July, however.)