Recently, an adjustment in July employment growth data from the US Labor Department made waves in news headlines. Although the government agency initially reported a sharp increase in the national employment rate, it subsequently went back to correct its reports. Revised July employment data actually showed that the rate of increase in employment was less than initially estimated by economists. Is this sufficient cause for worry? Should job seekers throughout the country worry about the actual state of the economy? Read on, to find out the truth. Then, decide for yourself if you have just cause to be concerned about the fact that US Labor Department Corrected July Employment Data.
US Labor Department Corrected July Employment Data: The Facts versus the Initial Reports
Initial estimates for the July rate of job growth had the number pegged at 233,000 jobs. The original report from the US Labor Department stated that the rate of employment for the month of July had spiked by some 208,000 jobs. Of course, this optimistic upward revision brought on a slew of similarly positive statements from numerous economists. That number was then revised downward to a more accurate 209,000 job increase last month. As expected, the release of the actual number created a significant wave of dismay through the media.
Despite the likely undertone of disappointment, many observers noted that an increase of ‘only’ 209,000 indicates major strides in the U.S. economy over the past few months. Further confounding the situation of the US Labor Department’s reports is the news it delivered on the rate of unemployment. In June 2014, overall levels of unemployment in the U.S. had reached the lowest point recorded in almost six years’ time: 6.1 percent. However, this rate increased to 6.2 percent in July. Is this cause for worry? Not necessarily. The figures can be explained by the increase in labor force, up by 329,000 new workers. In official terms, this means the rate of civilian labor force participation increased to 62.9 percent last month, up from 62.8 percent in June.
US Labor Department’s August Employment Rate Predictions
In order to soothe the negative sentiment this downward revision may cause, experts are saying the job rate grew by 47,000 new jobs in the sector of professional and business services. True, this is a lower rate of increase, compared to the 73,000 originally posted in July. The figures still increased. The overall level of job growth, which exceeded 200,000 new jobs for the sixth consecutive month, is encouraging. The last time the US economy showed such consistently positive signs, the year was 1997, and the recession was still a long ways off.
Forecasts for job growth in the coming months remain positive. Economists expect the growth estimate for non-farm payrolls in August to introduce 180,000 new jobs (with a 37 point index of the 50% correct value and a 70 point index of the 80% correct value). In fact, the forecasts for the remainder of the year continue these positive trends. The experts expect the US economy to add 160,000 new jobs in September, 130,000 in October, 150,000 in November and 130,000 in December. It’s easy to note that the rate of growth will, indeed, slow down, as they year approaches its end. However, most economists note that this trend is normal and should not cause us any concern. If anything, it might be a prompt for the Federal Reserve to keep interest rates at their current historically low values.
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