Jobless Rate Stays Steady in July, but More Workers Hit the Bricks

Those looking for a disappointing employment report weren't let down this morning.

Job losses continued in July, the Labor Department said, though they were concentrated in the manufacturing sector. In a bit of a surprise, the unemployment rate remained steady at 4.5%. Wage growth was strong again in July, which has continued to offset some of the weakening effects of rising layoffs.

Overall, nonfarm payrolls dropped by 42,000 in July, following the loss of 93,000 jobs in June. The June numbers were revised upward. The manufacturing sector shed 49,000 jobs, led by a loss of 45,000 in the electrical equipment and industrial machinery sector, which includes high-technology industries. That sector accounts for 40% of the total job losses in manufacturing during the last 12 months.

Equity futures markets reacted somewhat favorably to the release, based on the idea that perhaps the economy is starting to recover, but there isn't much evidence of a turnaround in this report. The losses in manufacturing were buffered by a gain of 31,000 jobs in the government sector, due to large seasonal adjustments in education jobs. The service sector gained 5,000 jobs after a revised 33,000 gain in June.

Meanwhile, wages rose four cents, or 0.3%, to $14.35 an hour from $14.31 an hour. Year-over-year, wages are growing at the fastest pace since April 1998.

The weekly workweek was unchanged at 34.2 hours.

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