**MNI 5 THINGS: US July Unemp Rate Falls To 3.9%; Jobs +157k>

--5 Things We Learned From The July Employment Data

By Kevin Kastner, Sara Haire, and Shikha Dave

     WASHINGTON (MNI) - The following are the key points from the July 

employment report released by the Bureau of Labor Statistics Friday: 

     - The employment data were generally strong after looking past the 

headline number. Payrolls growth was weaker than expected, but followed 

a large net upward revision to the previous two months. At the same 

time, the unemployment rate dipped back to 3.9% due to a drop in 

household unemployment while hourly earnings posted a solid 0.3% gain, 

as expected, after a downward revised 0.1% rise in the previous month. 

     - Nonfarm payrolls rose 157,000, below the 190,000 gain expected. 

The whisper number was for a 204,000 gain, so a surprise to the 

downside. Likewise, private payrolls rose only 170,000, compared with a 

202,000 gain expected. An MNI analysis showed analysts have 

underestimated payrolls in the each of the last two July reports as well 

as in May and June of this years, so today's data breaks that trend. 

     - The unemployment rate's dip to 3.9% reflects an unchanged 

participation rate at 62.9%, but a sharp pullback in the number of 

unemployed after the May surge. The unrounded rate was 3.871% for the 

current month's unemployment rate. Household employment was up 389,000, 

while unemployed level fell by 284,000, so the labor force rose by 

105,000. The alternate U-6 Rate fell to 7.5% from 7.8% in June.     

     - Hourly earnings were up 0.3% in the month (+0.259% unrounded), as 

expected after a downward revised 0.1% gain in June, so the year/year 

rate stayed at 2.7% after rounding, though it dipped a bit unrounded. 

Average weekly hours fell to 34.5 hours, so along with the payrolls 

gain, aggregate weekly hours fell by 0.2%. 

     - Payrolls in May and June were revised up by a net 59,000, 

reflecting upward revisions to both May and June. Private jobs were up 

170,000, softer than the 202,000 gain expected. Within payrolls, there 

were solid gains for business and professional services (+51k), leisure 

and hospitality (+40k), manufacturing (+37k), and health care (+34k), 

but retail jobs were only +7k and utilities, mining, and transportation 

and mining jobs all fell. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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