The American economy continued to recover in July, recording the largest month of job growth so far this year. This brought total employment to 146.8 million jobs, 3.7% below February 2020 levels. The unemployment rate fell from 5.9% to 5.4%, according to the Bureau of Labor Statistics (BLS).
The BLS continues to revise estimates from previous months with each report. The latest figures for May and June also show that those two months added 119,000 more jobs than initially indicated.
The three industries leading July growth were leisure and hospitality, government, and private education and health services. Leisure and hospitality gained 380,000 jobs — 40.3% of the total monthly increase. The sector will need to add 1.7 million more to return to pre-pandemic levels.
Government followed with 240,000 jobs added. Around 221,000 of these were in local public education. The pandemic has caused distortions in “the normal seasonal buildup and layoff patterns” in the education field, which the BLS explained likely contributed to July job growth.
Private education added another 40,000 jobs. Health care and social assistance grew by 47,000 positions.
The leisure and hospitality sector and government drove July job growth.
Meanwhile, average hourly earnings continued to rise, reaching another record of $30.54. The BLS cited “the rising demand for labor associated with the recovery from the pandemic” as a possible reason for the increase in wages. Employment fluctuations in higher- or lower-paying industries could also impact average earnings.
Average hourly earnings increased 4% since July 2020.
The 0.5 percentage point drop in the unemployment rate followed a slight increase in June. There are still 8.7 million unemployed Americans, 3 million more than in February 2020.
Fewer Americans teleworked in July, accounting for 13.2% of employed people compared to 14.4% in June. Last month, 5.2 million people reported being unable to work because their employer closed or lost business due to the pandemic”, 1 million fewer than those who said so in June.