Hiring in July cuts jobless rate to 4.3%
A drop in the unemployment rate to a 16-year low raises a tantalizing question about the job market: How much better can it get?
Earlier this year, economists worried that the low unemployment rate meant businesses would struggle to find workers and that would drag down the pace of hiring. Those fears were heightened by a tiny job gain in March and modest hiring in May.
Yet Friday’s jobs report suggests such concerns are premature. Employers added 209,000 jobs, after a solid gain of 231,000 in June, the Labor Department said. The unemployment rate ticked down to 4.3 percent, from 4.4 percent, matching the low reached in May.
Economists were particularly encouraged by the fact that more Americans are coming off the sidelines and finding jobs. For the first few years after the recession, many of the unemployed stopped looking for work.
Some were discouraged by the lack of available jobs. Others returned to school or stayed home to take care of family. The government doesn’t count those out of work as unemployed unless they are actively searching for jobs.
That trend began to reverse last year and has continued into 2017. To many economists, that means robust hiring could continue for many more months or even years.
“There’s more people willing to work than the unemployment rate would have you believe,” said Nick Bunker, a senior policy analyst at the Washington Center for Equitable Growth, a liberal think tank.
Employers have added an average of 184,000 jobs a month through July, compared with 187,000 in 2016. Monthly job gains topped 200,000 on average in 2014 and 2015.