Job Market: July 2015

July has without a doubt been a much better month for the job market. We saw a steady increase in employment as wages rebounded and signs of an improving economy made themselves known. In fact, those very signs nearly paved the way to a Federal Reserve interest hike in September. Additionally, it seems that industry is picking up as payrolls for jobs unrelated to agriculture increased to 215,000 in July, which can be directly linked to a pickup in construction and manufacturing jobs. This major increase has resulted in a decrease in the unemployment rate, which recently sat at a seven-year low of 5.3 percent.

One of the greatest concerns among workers in all fields, industry especially, was the steady decrease in workable hours. Okay, so what does that mean exactly? Essentially an individual forced to work ten hours per week due to economic constraints as opposed to a full forty would most definitely experience issues in their life as they would be unable to provide for their family or even themselves. We’ve seen a lot of this lately and it has been causing problems among the working class. Not only is this bad for the people and their morale, it is abysmal for the economy. Fortunately, it seems that this boost in the economy has caused the average workweek to increase to 34.6 hours from 34.5 in June. This might not seem like the greatest increase, but it is a cleared hurdle, and it is keeping the Fed on track for a rate hike in September. In other words, things are doing much better, with indications of becoming even better in the near future.

As it turns out, the job market July 2015 report was precisely as expected. The Fed, in fact, upgraded its assessment of the labor market, stating that it was continuing to improve with solid job gains and declining unemployment. The word from the U.S. Central Bank is that they’re anticipating a raise in lending rates once there has been greater improvement. This is an important development as the market has not seen a rate rise since 2006.

Not all news is good news. U.S. stocks immediately began to drop as traders saw an increased chance of a rate hike. The dollar rose in value, but did eventually drop once again, and hiring has slowed down considerably. This hiring slowdown is not exactly a mystery; it is a direct result of the loss of jobs in the energy sector, though there has been some evidence to the contrary. Still, job growth remains at double the pace needed to keep up with today’s population growth, and average hourly earnings have increased by a full five cents. There is definitely some improvement here, but economists typically associate a 3.5 percent growth rate with full employment, and it is currently sitting at 0.2 percent. We have a long way to go.

Is any of this pointing toward a boost in the economy? With wages rising 0.6 percent in July, and being up 4.9 percent from one year ago, it certainly seems that there are improvements, but there are just as many declines. Still, the economy is not random. The numbers are always quite clear, despite what some would have you believe. There will be plenty of signs to point us in the right direction, whatever direction it takes. The most important thing to remember is that the variable will always be people. Without people, the economy would not function, but they also cause it to fluctuate, making it unpredictable to a point.

At Van Horn Law Group, P.A., our experienced South Florida lawyer and Ft. Lauderdale Bankruptcy lawyer is ready to review your case to see what options are available to you. With years of experience helping people just like you with their financial decisions, you can be confident that we will not lead you astray.