US Nonfarm Payroll Increases by 187,000 in July; Unemployment Declines to 3.5%

The US Bureau of Labor Statistics (BLS) reported Friday (8-4-23) that total nonfarm payroll employment increased by 187,000 in July. July’s increase is significantly less than the average monthly gain of 312,000 over the prior 12 months.

Notable growth occurred in the following industries:

• Health care added 63,000 new jobs in July, compared to the average monthly gain of 51,000 jobs in the prior 12-month period.
• Social assistance added 24,000 in July. Job growth in social assistance has averaged 23,000 in the previous 12 months.
• Employment in financial activities increased by 19,000 in July. The industry has added an average of 16,000 jobs per month in Q2 after employment was essentially flat in Q1.
• The construction sector added 19,000 new jobs in July, in line with the average monthly gain of 17,000 in the prior 12 months.
• Employment in professional and business services changed little in July, declining by 8,000 jobs. Monthly job growth in the industry has averaged 38,000 in the prior 12 months.
• Leisure and hospitality was mostly flat in July, adding 17,000 new jobs. This marks the fourth consecutive month of little employment change. Employment in the industry remains below its February 2020 level by 352,000, or 2.1%.

Employment was little changed in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; retail trade; transportation and warehousing, information; and government.

In July, the unemployment rate declined 0.1% to 3.5%, and the number of unemployed persons declined from 6.0 million in June to 5.8 million in July. The unemployment rate has ranged from 3.4–3.7% since March 2022.

The BLS noted that monthly revisions result from additional reports received from businesses and government agencies since the last published estimate and from recalculations of seasonal factors. As a result, the change in total nonfarm payroll employment for May was revised down by 25,000, from 306,000 to 281,000; and the change for June was revised down by 24,000, from 209,000 to 185,000. With these revisions, employment in May and June combined is 49,000 lower than previously reported.