The economy added half a million jobs in July, signaling another strong month of economic growth and recovery. This happened against a backdrop of surging inflation and rate hikes that have economists worrying about a recession. However, continued strong employment is tempering dire economic forecasts.
Jobs as a Strong Signal in an Uncertain Economy
Jobs are a strong signal of a booming economy, and in this regard, the economy remains strong. Additionally, we’ve recently seen the following signs of strength:
- Consumer demand remains high; consumers are not altering their purchasing decisions based on the interest rate changes.
- A key inflation report shows inflation finally slowing: there was no increase in prices overall from June to July 2022 (compared to a 1.3% increase from May to June). Prices overall increased 8.5% year-over-year, which is a reduction of the 9.1% increase in June. This good news sent stocks soaring.
- Gas prices have been falling for the last 57 days.
Key Takeaways from the July 2022 Jobs Report
The major takeaway from the July 2022 jobs report is that hiring remains robust, and doesn’t seem to be reacting either to inflation or interest rate cuts. Additionally:
- Leisure and hospitality gained nearly a hundred thousand jobs, which is both a strong sign of economic recovery and also an indicator of robust consumer spending on evenings out, trips and business travel.
- Employment in professional and business services has shown some of the most robust growth during this recovery: it is 986,000 higher than in February 2020.
Growth in Leisure and Hospitality
In July, leisure and hospitality added 96,000 jobs, with most of that growth concentrated in food services and drinking places (+74,000).
Employment in leisure and hospitality has some ground to make up, however. It is below its February 2020 level by 1.2 million, or 7.1 percent.
Professional & Business Services Grows, Too
Employment in professional and business services increased employment by 89,000 in July.
The biggest gainers included:
- management of companies and enterprises (+13,000)
- architectural and engineering services (+13,000)
- management and technical consulting services (+12,000)
- scientific research and development services (+10,000).
Other Key Highlights
Many other sectors of the economy experienced growth in July:
- Employment in health care rose by 70,000 in July. Job gains occurred in ambulatory health care services (+47,000), hospitals (+13,000), and nursing and residential care facilities (+9,000).
- Employment in government rose by 57,000 in July.
- Employment in construction increased by 32,000 in July, as specialty trade contractors added 22,000 jobs. Construction employment is 82,000 higher than in February 2020.
- Manufacturing employment increased by 30,000 in July. Employment in durable goods industries rose by 21,000, with job gains in semiconductors and electronic components (+4,000) and miscellaneous durable goods manufacturing (+4,000). Employment in manufacturing is 41,000 above its February 2020 level.
- In July, social assistance added 27,000 jobs, including a gain of 19,000 in individual and family services.
- Employment in retail trade increased by 22,000 in July, although it has shown no net change since March. In July, job gains occurred in food and beverage stores (+9,000) and general merchandise stores (+8,000). Retail trade employment is 208,000 above its level in February 2020.
- In July, transportation and warehousing added 21,000 jobs. Employment rose in air transportation (+7,000) and support activities for transportation (+6,000).
Catch Up With Previous Jobs Reports
- Continued growth in June
- Strong growth in May
- Big month of growth in April
- March’s strong growth
- February’s blockbuster growth
- January’s strong growth despite Omicron
- Promising news for hospitality in December
- November’s mixed picture
- October’s robust gains
- A slower-than-expected report in September
- The summer‘s roaring recovery trajectory
- Better than expected growth in June, especially in travel
- Strong signs of recovery in May
- An anemic April jobs report