July 2017 Unemployment Update

The labor market continues to rest on last month’s plateau.

Continuing our ongoing coverage of the labor market, the July Employment Situation release from the Bureau of Labor Statistics continues to suggests that the labor market has stabilized, with the tightening of the first half of the year tapering off.  The headline U-3 unemployment rate recovered 0.1% to return to May’s level, and the U-6 “underemployment” rate remained unchanged at a level slightly above its May low. This consistent with the Federal Reserve’s decision to leave interest rates unchanged in July.

 

January


June


July

7-Month

Change  

U-3 Unemployment Rate

4.8%

4.4%

4.3%

-0.5%

U-6 Unemployment Rate

9.4%

8.6%

8.6%

-0.8%

     

Civilian Noninstitutional Population*

254,082

254,957

255,151

+1,069

Civilian Labor Force

159,716

160,145

160,494

+778

Employed

152,081

153,168

153,513

+1,432

Unemployed

7,635

6,977

6,981

-654

Employment-Population Ratio

59.9%

60.1%

60.2%

+0.3%

Part-time for Economic Reasons

5,840

5,326

5,282

-558

Marginally Attached to Workforce

1,752

1,582

1,629

-123

  • Discouraged Workers

532

514

536

+4

     

* All numbers are in thousands

    


While the general trend is stable, the loss of all improvement in the discouraged workers since the start of the year, as well as the rise in marginally attached workers is a little disturbing.  However, given the typical spread between the U-3 and U-6, it’s probably appropriate to consider this noise given the otherwise positive tone of the year.  As long as the Fed holds off on interest rate increases and the White House doesn’t precipitate any major economic crises by bungling the budget or debt limit processes (or declaring major trade or conventional wars), the labor market will probably remain healthy for the near future.

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