July Jobs Report Paints a Picture of Nervous Employers

Private sector hiring is still sluggish; revisions slash 50,000 private sector job gains from June.

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Manufacturing employment continues to rise as seasonal layoffs in motor vehicles and parts are fewer than expected. Manufacturing added 36,000 jobs last month, a strong figure closely in line with April and May figures. Manufacturing employment has risen every month since January, which was the first increase in three-and-a-half years.

Healthcare jobs continued to grow in July, and 12,000 jobs were added in transportation and warehousing (bringing total gains to 56,000 since the transportation and warehousing hit an employment low in February.)

Also, some ammo for the bulls: The average workweek for private sector employees unexpectedly increased by 0.1 hour to 34.2 hours. The manufacturing workweek increased 0.1 hour to 40.1 hours and the average workweek for private production and non-supervisory workers grew by 0.1 hour to 33.5 hours in July.

"The report was weaker than expected—but not as disappointing as implied by the payroll employment component because of offsetting strength in hours and earning," wrote Morgan Stanley economists David Greenlaw and Ted Wieseman in a morning note. "In fact, aggregate weekly payrolls (the gauge that captures the combination of payrolls, hours and earnings) rose 0.6 percent —a tick better than we expected and matching the high seen in the prior five months."

Other job market data may be more optimistic about July, showing online job postings increasing to post-2008 highs. The Conference Board reports that online postings for job openings jumped by 139,200 in July. The total openings last month were nearly 4.3 million, up from 4.15 million in June and less than 3.3 million a year ago. Job search site Indeed.com reported that transportation sector job postings in July were more than double the same month a year ago. Indeed.com reported year-over-year postings growth in 11 out of 12 tracked sectors. Healthcare was the only sector to see postings decrease.