U.S. July Unemployment Rate Declines to 5.4%

Total nonfarm payroll employment rose by 943,000 in July, and the unemployment rate declined by 0.5 percentage point to 5.4 percent. Notable job gains occurred in leisure and hospitality, in local government education, and in professional and business services.

THE EMPLOYMENT SITUATION — JULY 2021

Total nonfarm payroll employment rose by 943,000 in July, and the unemployment rate
declined by 0.5 percentage point to 5.4 percent, the U.S. Bureau of Labor Statistics
reported today. Notable job gains occurred in leisure and hospitality, in local government
education, and in professional and business services.

This news release presents statistics from two monthly surveys. The household survey
measures labor force status, including unemployment, by demographic characteristics. The
establishment survey measures nonfarm employment, hours, and earnings by industry. For
more information about the concepts and statistical methodology used in these two surveys,
see the Technical Note.

Household Survey Data

The unemployment rate declined by 0.5 percentage point to 5.4 percent in July, and the
number of unemployed persons fell by 782,000 to 8.7 million. These measures are down
considerably from their highs at the end of the February-April 2020 recession. However,
they remain well above their levels prior to the coronavirus (COVID-19) pandemic (3.5
percent and 5.7 million, respectively, in February 2020). (See table A-1. See the box note
at the end of this news release for more information about how the household survey and its
measures were affected by the coronavirus pandemic.)

Among the major worker groups, the unemployment rates declined in July for adult men
(5.4 percent), adult women (5.0 percent), Whites (4.8 percent), Blacks (8.2 percent), and
Hispanics (6.6 percent). The jobless rates for teenagers (9.6 percent) and Asians (5.3
percent) showed little change over the month. (See tables A-1, A-2, and A-3.)

Among the unemployed, the number of persons on temporary layoff fell by 572,000 to 1.2
million in July. This measure is down considerably from the high of 18.0 million in April
2020 but is 489,000 above the February 2020 level. The number of permanent job losers
declined by 257,000 to 2.9 million in July but is 1.6 million higher than in February
2020. (See table A-11.)

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by
560,000 in July to 3.4 million but is 2.3 million higher than in February 2020. These
long-term unemployed accounted for 39.3 percent of the total unemployed in July. The
number of persons jobless less than 5 weeks increased by 276,000 to 2.3 million.
(See table A-12.)

The labor force participation rate was little changed at 61.7 percent in July and has
remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The
participation rate is 1.6 percentage points lower than in February 2020. The employment-
population ratio increased by 0.4 percentage point to 58.4 percent in July and is up by
1.0 percentage point since December 2020. However, this measure is 2.7 percentage points
below its February 2020 level. (See table A-1.)

In July, the number of persons employed part time for economic reasons, at 4.5 million,
was about unchanged. There were 4.4 million persons in this category in February 2020.
These individuals, who would have preferred full-time employment, were working part time
because their hours had been reduced or they were unable to find full-time jobs.
(See table A-8.)

In July, the number of persons not in the labor force who currently want a job was 6.5
million, about unchanged over the month but up by 1.5 million since February 2020. These
individuals were not counted as unemployed because they were not actively looking for work
during the last 4 weeks or were unavailable to take a job. (See table A-1.)

Among those not in the labor force who currently want a job, the number of persons
marginally attached to the labor force, at 1.9 million, was little changed in July but is
up by 435,000 since February 2020. These individuals wanted and were available for work
and had looked for a job sometime in the prior 12 months but had not looked for work in
the 4 weeks preceding the survey. The number of discouraged workers, a subset of the
marginally attached who believed that no jobs were available for them, was 507,000 in July,
down by 110,000 from the previous month but 106,000 higher than in February 2020.
(See Summary table A.)

Household Survey Supplemental Data

In July, 13.2 percent of employed persons teleworked because of the coronavirus pandemic,
down from 14.4 percent in the prior month. These data refer to employed persons who
teleworked or worked at home for pay at some point in the last 4 weeks specifically
because of the pandemic.

In July, 5.2 million persons reported that they had been unable to work because their
employer closed or lost business due to the pandemic–that is, they did not work at all
or worked fewer hours at some point in the last 4 weeks due to the pandemic. This
measure is down from 6.2 million in June. Among those who reported in July that they were
unable to work because of pandemic-related closures or lost business, 9.1 percent
received at least some pay from their employer for the hours not worked, little changed
from the previous month.

Among those not in the labor force in July, 1.6 million persons were prevented from
looking for work due to the pandemic, essentially unchanged from June. (To be counted as
unemployed, by definition, individuals must be either actively looking for work or on
temporary layoff.)

These supplemental data come from questions added to the household survey beginning in
May 2020 to help gauge the effects of the pandemic on the labor market. The data are not
seasonally adjusted. Tables with estimates from the supplemental questions for all months
are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data

Total nonfarm payroll employment rose by 943,000 in July, following a similar increase in
June (+938,000). Nonfarm payroll employment in July is up by 16.7 million since April 2020
but is down by 5.7 million, or 3.7 percent, from its pre-pandemic level in February 2020.
In July, notable job gains occurred in leisure and hospitality, in local government
education, and in professional and business services. (See table B-1. See the box note at
the end of this news release for more information about how the establishment survey and
its measures were affected by the coronavirus pandemic.)

In July, employment in leisure and hospitality increased by 380,000. Two-thirds of the job
gain was in food services and drinking places (+253,000). Employment also continued to
increase in accommodation (+74,000) and in arts, entertainment, and recreation (+53,000).
Despite recent growth, employment in leisure and hospitality is down by 1.7 million, or
10.3 percent, from its level in February 2020.

In July, employment rose by 221,000 in local government education and by 40,000 in private
education. Staffing fluctuations in education due to the pandemic have distorted the
normal seasonal buildup and layoff patterns, likely contributing to the job gains in July.
Without the typical seasonal employment increases earlier, there were fewer layoffs at the
end of the school year, resulting in job gains after seasonal adjustment. These variations
make it more challenging to discern the current employment trends in these education
industries. Since February 2020, employment is down by 205,000 in local government
education and 207,000 in private education.

Employment in professional and business services rose by 60,000 in July. Within the
industry, employment in the professional and technical services component rose by 43,000
over the month and is 121,000 above its February 2020 level. (Professional and technical
services includes industries such as accounting and bookkeeping services, management and
technical consulting services, and scientific research and development services.) By
contrast, employment in the administrative and waste services component (which includes
temporary help services) changed little over the month (+20,000) and is 577,000 lower than
in February 2020. Employment in the management of companies and enterprises component was
also little changed over the month (-3,000) but is 100,000 lower than the level in
February 2020. Employment in professional and business services overall is down by 556,000
since February 2020.

Transportation and warehousing added 50,000 jobs in July. Job growth occurred in transit
and ground passenger transportation (+19,000), warehousing and storage (+11,000), and
couriers and messengers (+8,000). Employment in transportation and warehousing has grown
by 534,000 since April 2020; the industry has recovered 92.9 percent of the jobs lost
during the February-April 2020 recession (-575,000).

The other services industry added 39,000 jobs in July, with gains in membership
associations and organizations (+17,000) and in personal and laundry services (+15,000).
Employment in other services is 236,000 lower than in February 2020.

Health care added 37,000 jobs in July. Job gains in ambulatory health care services
(+32,000) and hospitals (+18,000) more than offset a loss of 13,000 jobs in nursing and
residential care facilities. Health care employment is down by 502,000 since February 2020.

Employment in manufacturing increased by 27,000 in July, largely in durable goods
manufacturing. Within durable goods, job gains occurred in machinery (+7,000) and
miscellaneous durable goods manufacturing (+6,000). Manufacturing employment is 433,000
below its February 2020 level.

Employment in information increased by 24,000 over the month, with three-quarters of the
gain in motion picture and sound recording industries (+18,000). Employment in information
is down by 172,000 since February 2020.

Employment in financial activities rose by 22,000 over the month, largely in real estate
and rental and leasing (+18,000). Employment in financial activities is down by 48,000
since February 2020.

Employment in mining increased by 7,000 in July, reflecting a gain in support activities
for mining (+6,000). Mining employment has risen by 49,000 since a trough in August 2020
but is 103,000 below a peak in January 2019.

Employment in retail trade changed little in July (-6,000), following large increases in
the prior 2 months. In July, job gains in gasoline stations (+14,000), miscellaneous
store retailers (+7,000), and nonstore retailers (+5,000) were more than offset by a loss
in building material and garden supply stores (-34,000). Since February 2020, employment
in retail trade is down by 270,000.

In July, employment showed little change in construction and wholesale trade.

In July, average hourly earnings for all employees on private nonfarm payrolls increased
by 11 cents to $30.54, following increases in the prior 3 months. Average hourly earnings
for private-sector production and nonsupervisory employees also rose by 11 cents in July
to $25.83. The data for recent months suggest that the rising demand for labor associated
with the recovery from the pandemic may have put upward pressure on wages. However,
because average hourly earnings vary widely across industries, the large employment
fluctuations since February 2020 complicate the analysis of recent trends in average
hourly earnings. (See tables B-3 and B-8.)

In July, the average workweek for all employees on private nonfarm payrolls was unchanged
at 34.8 hours. In manufacturing, the average workweek increased by 0.2 hour to 40.5
hours, and overtime was unchanged at 3.2 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours.
(See tables B-2 and B-7.)

The change in total nonfarm payroll employment for May was revised up by 31,000, from
+583,000 to +614,000, and the change for June was revised up by 88,000, from +850,000 to
+938,000. With these revisions, employment in May and June combined is 119,000 higher
than previously reported. (Monthly revisions result from additional reports received from
businesses and government agencies since the last published estimates and from the
recalculation of seasonal factors.)