The Labor Department has just released its July jobs report, and the news is moderately good. The U.S. economy added 163,000 jobs in July, beating the expectations of many economists. The unemployment rate nationally ticked up very, very slightly, to 8.3. percent from 8.2 percent. More than anything, that's probably a reflection of the 100,000-plus number, which indicates that people are coming back into the workforce, although not in droves.
More workers seeking work means that workers are optimistic about getting a job, but that has the superficially negative effect of raising the total number of unemployed people.
[UPDATE: Actually, as Jared Bernstein notes, the June-July rate change was 8.22 to 8.25, which compelled a round-up to 8.3 percent. No meaningful statistical change there.]
Unfortunately, the Bureau of Labor Statistics revised last month's bad jobs number down, to 64,000 from 80,000. Some early feedback on the July report from economists who tweet, blog, and dispatch their thoughts via email suggests that third quarter growth is likely stronger in the U.S. than its was in second — something above 2 percent, versus the second quarter's tepid 1.5 percent.
Digging into the report itself, the highlights are where they're been for some time now: professional services, manufacturing, and in restaurants and bars, which all saw job gains. The rest of the employment universe that the BLS tracks was, in the dry language of statistics, "essentially unchanged," i.e. "not very good."
Against the backdrop of the Federal Reserve's decision earlier this week to take no new action on the economy, this jobs report is a mild vindication of Ben Bernanke & Co.'s conservative plan. The economy doesn't appear to be flatlining or heading south. So the Fed can play a waiting game for the next few months, and if it needs to, announce new measures at its September meeting.
But let's not get too excited here. While 163,000 is a positive number, it's far from the 300-400,000 we need to power out of the Great Recession and get the roughly 13 million currently unemployed Americans back in the job. Earlier this year, when we were adding jobs at a 200,000-plus clip each month, the July report would have been a disappointment.
This is also the longest sustained period of U.S. unemployment over 8 percent since the the late 1940s, when the government started keeping score.
In California, we can see the July report as an indication that the state economy isn't going to reverse its recent momentum. We've been adding jobs as a faster pace than the U.S. as a whole. Our employment rate is higher, at 10.7 percent, but coming down faster.