US : "A Terribly Slow Pace of Job Growth": Private Sector Hiring Disappoints, Again

"Tepid", "anemic", "desultory" and "punk" are among the adjectives being used to describe Friday's July jobs report.

At 131,000 the headline payroll loss was worse than expected. In addition, the tally for May and June was revised down by nearly 100,000, further evidence the U.S. economy cooled considerably after its first-quarter spurt.

"This remains a terribly slow pace of job growth," writes Dan Greenhaus, chief economic strategist at Miller Tabak.

The big disappointment was private sector hiring, which totaled 71,000 last month, weaker than anticipated. (As expected, government payrolls fell by 143,000 as temporary census workers were let go.)

"The private sector number is the most disturbing," Tig Gilliam, CEO of Adecco Group North America, says in the accompanying video. "It's great that we have a positive number but we're really not seeing an acceleration of private sector jobs, which is what we need to see fairly soon."

Year-to-date, the private sector had added about 630,000 jobs, far short of the level needed to replace the nearly 8 million jobs lost since the recession officially began in December 2007. The unemployment rate held steady at 9.5% while the "real" unemployment rate (U6) remained at 16.5%. With 14.6 million Americans out of work (44% for six months or longer), the unemployment rate being unchanged is not good news because it shows many Americans remain discouraged or are dropping out of the labor force -- and out of the official tally.

"We've got to expect that number to go up because we have so many potential workers sitting on the sidelines," Gilliam says. "As the job market gets better, more people will get active and engaged and that will have the effect of increasing the unemployment rate."

Gilliam notes temporary hiring continues to improve, which is traditionally a good leading indicator for future employment growth (and good for Adecco.) Both average hourly earnings and the average workweek rose in July, which are positive signs, but, overall, the U.S. employment picture remains grim.