The nation's unemployment rate edged up to 6.1 percent in July, but job growth was still quite healthy, the government said today.
July's rate, reported by the Labor Department, compares with 6 percent in both June and May. Economists were expecting the slight uptick and do not believe it signals a deterioration in the economy.The report hasn't changed the belief that the Federal Reserve is preparing to nudge interest rates higher, either this month or next, in an attempt to slow economic growth and snuff out any potential increase in inflation.
In Utah, unemployment in July increased to 3.7 percent from 3.4 percent in June, but still is one of the lowest figures in the nation, according to Lecia Parks Langston, chief economist for the Utah Department of Employment Security.
She said the June jobless figure dropped for the first time in 1994 and appeared to be an economic anomaly rather than the beginning of a trend. Langston said the July figure returns the state to the trend of a slightly increasing unemployment rate.
Langston said the low unemployment rate in Utah in late 1993 and 1994 couldn't be sustained and perhaps even was undesirable. "In order for employers to expand their employment levels and for the economy to experience growth, there must be at least some unemployed workers able and available to take the newly produced jobs," she said.
Nationally, economist Robert Dederick of Northern Trust Co. in Chicago said the Fed probably will push rates up by a quarter of a percentage point after its Aug. 16 meeting unless statistics released between now and then are unexpectedly soft.
"The key thing is we are getting more aggressive hiring. We may see a fading but so far it's not occurring," he said.
The unemployment rate is derived from a survey of households. A separate survey of employers' payrolls painted a bright picture.
The economy created 259,000 new jobs in July, about 60,000 more than analysts forecast, after producing 356,000 jobs in June.
Since the start of the year, the economy has added 2 million jobs, bringing the total to 113.6 million.
"This is continuing good news for American workers. We're right on track," Labor Secretary Robert Reich said in a telephone interview. "We have created, in the last 18 months, three times more private-sector jobs than were created in the previous four years."
He declined to comment directly on the Federal Reserve but said concerns that the economy's strong growth would trigger inflation were premature.
"At this stage there's no reason to be concerned about inflation. We still have room for growth. We're not in any way bumping up against the wall," he said.
The bulk of job growth in July occurred in services, where payrolls grew by 138,000, and retailing, up by 75,000. Gains were strong at temporary help firms, in health care and at restaurants.
Construction jobs rose by 25,000, in line with recent moderate gains. Manufacturing jobs increased by only 6,000, held back by strikes and by temporary auto plant closings in preparation for the new model year.
Government jobs edged down by 2,000 while mining fell by 3,000.
Katharine G. Abraham, commissioner of the Bureau of Labor Statistics, noted a statistical aberration that artificially boosted job growth in June and slightly depressed it in July. The survey period was a week longer in June, so some new jobs that normally wouldn't have been counted until July were counted a month earlier.
The department said the number of unemployed people in July, 8 million, was up from 7.8 million in June.