Employment rate picks up, but remains disappointing
National nonfarm private-sector employment grew by 172,000 jobs in July, showing the highest hiring pace since February — though the unemployment rate ticked up to 8.3 percent, according to the U.S. Department of Labor’s Bureau of Labor Statistics.
Labor also reported government employment fell by 9,000 jobs across federal, state and local levels, and June's dismal job numbers dropped even further, as the agency revised them down from 80,000 to 64,000.
"As we're in a so-called recovery, we should really be doing much better than this … and we should have been able to bounce back faster, especially this far into it," said Herbert Gishlick, a finance and economics professor at Rider University. "Until something changes to get the private sector to start hiring, employment won't get dramatically worse — but it won't get better."
July's private-sector employment growth was shared across nearly all industry sectors, as professional and business services added 49,000 jobs; education and health services added 38,000 jobs; manufacturing added 25,000 jobs; leisure and hospitality added 27,000 jobs; and trade, transportation and utilities added 14,000 jobs.
Aside from government, only the construction sector decreased payrolls, shedding 1,000 jobs in July.
Gishlick said firms with less than 100 employees have the majority of employment growth potential, but with increasing government regulation and the looming fiscal cliff if the George Bush-era tax cuts are allowed to expire, "I don't know why anybody would want to go into business today."
"What we've been doing isn't going to work any more. The economy is burdened with excessive regulation, and it hits people at the bottom who don't have the same resources as larger companies to deal with the regulation," Gishlick said. "We need to ignite the entrepreneurial fires and get the private sector stimulated to create jobs, but I just don't see it happening in the near future, because there's nothing going on with creating incentives for people to hire and expand or start a business."
According to Labor's report, employment growth has averaged 151,000 jobs per month since January, which is on pace with the monthly gain of 153,000 jobs per month in 2011.