2010.08.0610:11:00UTC+00Employment Falls In July Amid End Of Temporary Census Jobs

Reflecting a notable decrease in temporary workers for the census, the Labor Department's report on the employment situation in the month of July showed that total employment fell by much more than expected for the month.

The Labor Department said Friday that non-farm payroll employment fell by 131,000 jobs in July following a revised decrease of 221,000 jobs in June. Economists had expected employment to drop by 87,000 jobs compared to the loss of 125,000 jobs originally reported for the previous month.

At the same time, the report showed that the unemployment rate came in unchanged compared to the previous month at 9.5 percent, reflecting a decrease in the size of the labor force. The unemployment rate had been expected to edge up to 9.6 percent.

While the hiring of temporary census workers contributed to a substantial increase in employment in the month of May, the elimination of the jobs as the census work is completed has contributed to the notable decreases in employment seen in the past two months.

The Labor Department said that the bigger than expected drop in employment in July was largely due to the elimination of 143,000 temporary census jobs.

On the other hand, the report showed that private sector employment increased by 71,000 jobs in July following a downwardly revised increase of 31,000 jobs in June.

Peter Boockvar, equity strategist at Miller Tabak, "Private sector job gains are averaging 90,000 per month this year, obvious hiring but still lackluster relative to what is needed to forcefully lower the unemployment rate."

The increase in private sector employment in July reflected moderate job growth in the manufacturing industry, which added 36,000 jobs following the addition of 13,000 jobs in the previous month.

Within the manufacturing sector, motor vehicle and parts makers added 20,700 jobs in July, reflecting fewer seasonal layoffs than normal.

While the health care and social assistance and transportation and warehousing industries also saw notable job growth, the increases were partly offset by job losses in the financial activities and professional and business services industries.

The report also showed that employees' average hourly earnings rose by 0.2 percent to $22.59 in July from $22.55 in June. The average workweek increased by 0.1 hour to 34.2 hours.

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