By Ben Leubsdorf
U.S. businesses added jobs at a sturdy pace last month,
extending the most robust stretch of hiring since before the
recession.
The question now: Is this the beginning of a breakout in hiring
that will lift wage growth and finally bring unemployment down to
levels consistent with a healthy economy?
In all, employers ranging from retail stores and professional
offices to factories and construction sites last month added a
total of 209,000 jobs, when adjusted for seasonal factors, the
Labor Department said Friday.
That marked a downturn from the 298,000 jobs created in June,
but was more than enough to yield the strongest six months of
payroll gains since 2006. July was the first time since 1997 that
employers added 200,000 or more jobs in six consecutive months.
Many scars from the financial crisis remain: 9.7 million
Americans are out of work, and wage growth--closely watched by the
Federal Reserve and others--didn't budge last month. Average hourly
earnings for private-sector workers rose just 2% in July over last
year, in line with the sluggish trend since the recession.
Wage growth should accelerate as the labor market tightens, UBS
chief U.S. economist Maury Harris said, "but the data don't show it
yet."
Still, the July numbers gave more evidence of healing across
wide swaths of the labor market. Even an uptick in the unemployment
rate--to 6.2%--was in part a sign of vigor as more people are now
seeking work.
The jobs recovery has been markedly uneven, a dynamic that
promises to weigh on consumers and keep the Fed--which has kept
short-term interest rates near zero since December 2008 to bolster
the U.S. economy through a financial crisis, a deep recession and a
lackluster recovery--on alert.
Fed Chairwoman Janet Yellen last month told lawmakers the Fed
had been fooled before by "false dawns" and officials "need to be
careful to make sure the economy is on a solid trajectory before we
consider raising interest rates."
One beneficiary of the recent upswing is Breona Jenkins, a
22-year-old who graduated in May from Georgia Institute of
Technology.
Ms. Jenkins was so sure about the high demand for workers in her
field of industrial engineering that she turned down a job
offer--twice.
She had her heart set on working at the Walt Disney Co., where
she had been an intern during college, and her patience paid off.
She starts Monday.
"I saw a lot of my classmates, most of my friends, getting
positions at companies even late, right up to graduation," Ms.
Jenkins said. "I wasn't concerned that I wouldn't find a
position."
Many companies are feeling upbeat, too.
DC Group, which installs and maintains power systems for data
centers and other clients, is expanding its Minneapolis
headquarters and hiring people to fill it. The company has hired 35
workers so far this year and plans to add 45 positions by the end
of 2014, Chief Executive Jon Frank said.
Mr. Frank said strong sales growth over the past four years
helped convince him to ramp up hiring. "I know when the customers
are coming," he said.
The national unemployment rate ticked up in July partly because
more people started looking for jobs and were counted as
unemployed, while they previously hadn't been counted as part of
the workforce at all. The labor-force participation rate remained
near its lowest level in decades, but its decline has leveled out
and it edged up last month to 62.9% from 62.8% in June.
A third of America's unemployed--3.2 million people--have been
out of work for more than six months. An additional 7.5 million
people were working part-time jobs last month because they couldn't
find full-time work. A broad measure of unemployment that includes
those part-timers and people marginally attached to the labor force
was 12.2% in July.
Adults with a college degree enjoyed a 3.1% unemployment rate,
while people without a high-school diploma faced unemployment of
9.6%.
Martha Velazquez, 51, was laid off from her job as an
administrative assistant last September. She has been looking for a
new job, but it hasn't been easy. At one recent interview, she said
her "not very good" credit rating became an issue.
Her unemployment benefits ran out in April. She couldn't make
rent and moved in with her sister in Whittier, Calif. Her car was
repossessed. At this point, she just needs a job. "It doesn't
matter the pay, really," Ms. Velazquez said.
Hiring in July wasn't limited to traditionally low-wage fields.
Manufacturers added 28,000 jobs and government payrolls grew by
11,000. The professional and business services sector led the way,
adding 47,000 jobs last month.
ServiceSource International Inc., a San Francisco-based company
that helps tech and other companies manage revenue, employs about
700 people at its sales office in Nashville, Tenn. It's in the
process of hiring an additional 100 workers there.
"We grow as our customers grow," Chairman and CEO Mike Smerklo
said. "Tech-enabled organizations and health-care technology
companies continue to grow and expand, and we benefit from
that."
Some job hunters are starting to see the trickle-down effect of
an improving job market. Alex Spicker graduated from college with a
bachelor's degree in chemistry in 2010, when the unemployment rate
was near its recession high-water mark of 10%. "The market was not
good, even for very technical degrees," he said.
He worked in restaurants, did some traveling and eventually went
to business school. He graduated from Arizona State University in
May and started a new job, as a supply-chain analyst for Intel
Corp., in mid-June.
These days, the 27-year-old said, people like him with M.B.A.s
are "well matched to the jobs that are available."
Write to Ben Leubsdorf at ben.leubsdorf@wsj.com
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