Magazine article Economic Trends

Labor Markets

Magazine article Economic Trends

Labor Markets

Article excerpt

Labor markets continued to improve in July. Nonfarm payroll employment rose by 207,000, slightly above the average monthly gain of 188,000 jobs in first half of the year. Job growth in May and June was revised upward by a combined 42,000 jobs, and average monthly job gains in 2005:IIQ was revised upward to 195,000.

Service-providing industries, which accounted for nearly all employment gains in July, added 203,000 jobs. Nearly one-quarter of these were in the retail sector, which posted the largest monthly gain in more than five years. Leisure and hospitality added 33,000 jobs did business services. Temporary help services, which some consider an indicator of future hiring, fell by 2,000 jobs. After adding 28,000 jobs in February (its strongest month this year), temporary help services added a mere 17,000 jobs over the past five months: Manufacturing employment continued to decline, failing by 4,000 jobs and bringing its losses since the beginning of the year to 31,000.

The employment-to-population ratio continued to inch upwards to 62.8%, whereas the unemployment rate was unchanged at 5.0%, its lowest level since August 2001.

The Diffusion Index of Employment measures the share of industries in which employment rose over a given period. The six-month index continued to trend upward from December 2004, reaching 64.9%, and the one-month index reached its highest level in more than a year, reflecting continued improvement in the labor market. …

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