The nation’s unemployment rate last month dropped from 7.6 percent to 7.4 percent, the lowest level in 4½ years, as businesses added another 162,000 jobs, the Labor Department reported Friday morning.
While the jobless rate has fallen quickly from over 8 percent in the last year, overall job growth has slowed somewhat in recent months from the strong 200,000 a month pace set earlier in the year. Revisions showed that 26,000 fewer jobs were created in May and June than previously reported.
“Definitely a bit soft,” said Brian Battle, director at Performance Trust Capital Partners. “200,000 is really the benchmark for maintaining the employment rate.”
Hiring was particularly strong in restaurants, big-box stores and other retail outlets, however. About 47,000 new jobs were created in department stores, home improvement stores and auto dealerships.
Eateries took on another 38,000 employees. Taken together, hiring at the malls has surged by more than 700,000 in the last year.
In some of the first evidence of the government-wide spending cuts that have prompted widespread furloughs of federal workers in recent months, the average workweek fell slightly to 34.4 hours from 34.5 hours.
“The rise in payrolls was offset by a shortening of the workweek,” said Justin Wolfers, economics professors at the University of Michigan, adding that’s a “worrying detail” in what was otherwise a “steady as she goes, amazingly consistent” jobs report.
Other than the slight decline in hours worked, however, there’s little other evidence of the across-the-board spending cuts that started taking effect in March, he said.
“Here’s the puzzle: Where’s the sequester?” he asked, noting that federal employment outside the Postal Service was flat in July after declining by 10,000 in June.
The sequester is having an impact outside government, however, in sectors such as health care and defense that thrive on government spending.
With cuts in Medicare ordered at the federal level and many state governments chiseling away at Medicaid spending, private health care job growth has been anemic this year.
Last month, hospitals and doctors’ offices added no new staff, and the average job growth in health care of 16,000 a month so far this year is almost half of last year’s growth rate of 27,000.
Wage growth also remains anemic at 1.9 percent in the last year — about half the rate of growth seen in the fourth year of previous economic recoveries.