We already showed that contrary to the strong headline payrolls print, the sole source of job gains in July was part-time jobs, which rose by 393K in the month, the biggest monthly increase since September 2016, as full-time jobs sunk by 54K. Which is why it should not surprise that of the 209K jobs added according to the Establishment survey, the sector that added the most jobs was the “food services and drinking places“, i.e. “waiters and barenders” category, which added 53,000 jobs, the highest monthly increase since March 2014. There have now been 89 consecutive months without a decline for waiter and bartender jobs, the strongest sector for US employment. Needless to say, these jobs fall within leisure and hospitality, that sector pays the worst wages, an average of $13.35 an hour, and $331.08 a week.
Next was professional and business services, which added 49,000 jobs. Within this category, administrative and waste services added 30,000 jobs, while temp workers rose by 14,700. The good news here is that hourly pay for this group averaged $26.07, and weekly pay $928.09, up 2.5% from a year ago. The bad news is that most of the jobs were in administrative and temp services, the lowest paying groupings.
Health care added 39,000 jobs, with job gains occurring in ambulatory health care services (+30,000) and hospitals (+7,000). Health care has added 327,000 jobs over the past year.
Employment in mining was essentially unchanged in July (+1,000).
While no other sector made a significant contribution to the July report, it is worth pointing out that for the second consecutive month there wasn’t a major job sector with a decline in jobs.
Commenting on the job distribution, Andrew Zatlin of SouthBay Research said “manufacturing hiring is settling down: oil related capex hiring is pausing and autos are hitting the brakes. This offsets other gains. That leaves services to drive the hiring, and it’s mostly positive. Healthcare hiring strengthened after the ACA repeal debacle. Temp hiring is also steady.”
In its observation of overall wge growth, which surprised to the upside rising 2.5% for all workers from a year ago, more than the 2.4% expected, that number can often be skewed by gains at the top. Furthermore, these are nominal numbers: assuming a 1.6% CPI as reported in June, that means “real” wage growth is roughly 1%. As the WSJ points out, “it’s hard to push the economy very far when consumers are seeing only 1% wage growth.”