August 6th, 2014 5:01 PM by Nick Rapplean
The unemployment rate for July edged up, while initial jobless claims grew and construction spending shrank.
Unemployment The unemployment rate for July grew by a tenth of a percent to 6.2 percent, but the economy also added 209,000 jobs for the month, according to last week’s report from the Bureau of Labor Statistics. While the rate gain might raise eyebrows, the month marked the sixth consecutive month that the economy added more than 200,000 jobs — a positive trend that hasn’t happened since the 1990s. All told, July recorded 9.7 million Americans out of work, which was not far off from June. On a yearly basis, the number of out-of-work people has dropped by 1.1 percent, or 1.7 million people. July’s labor force participation rate, which describes the percentage of employable people either with jobs or looking for one, stood at 62.9 percent, which wasn’t much different from June. The number of people who have been unemployed for 27 weeks or longer (the long-term unemployed) hovered at 3.2 million in July, which accounted for 32.9 percent of total unemployment. The number of Americans involuntarily employed part time in July either because their hours had been cut or because that’s the only work they could find stood at 7.5 million, little changed from June. “This report is consistent with a moderation in economic growth in the second half of the year,” Dean Maki, chief U.S economist for Barclays, told the New York Times. “This is a labor market that is growing solidly, just not quite as fast as in prior month.” Initial Jobless Claims First-time claims for unemployment benefits filed by the recently unemployed during the week ending July 26 jumped to 302,000, a 23,000-claim increase from the previous week’s revised level of 279,000, the Employment and Training Administration Reported last week. While the drop was sizable, it’s important to note that during last month initial jobless claims were at their lowest average level in eight years. Moreover, it’s worth remembering that the week before last initial jobless claims hit a 14-year low. Turning to the Administration’s four-week moving average, which is considered a more stable measure of new jobless claims, dropped to 297,250, a decline of 3,500 claims from the previous week’s level of 300,750. This was the lowest level for this average since April 15, 2006, when it was 296,000. Construction Spending Turning to real estate, construction spending during June dropped by 1.8 percent to an annual rate of $950,200 billion, but was 5.5 percent over June 2013’s estimate of $900,300 billion, the Census Bureau reported last week. July represented the largest monthly drop in more than three years. For a housing market that is looking for inventory to help keep prices in check, the slowdown in construction spending was not welcome news. Spending on private construction dipped 1 percent in June to an annual rate of $685,500 billion, with residential construction ticked down 0.3 percent to an annual rate of $355,900. Single-family home construction dropped by 1.4 percent to an annual rate of $184,200.