July Jobs Report: Generally Solid

By at 3 August, 2018, 11:06 am

Employment Population Ratio Highest Level Since January 2009


by Raymond J. Keating-

The July jobs report from the U.S. Bureau of Labor Statistics was generally solid.

The establishment survey pointed to a gain of 157,000 in payrolls. That’s not exactly robust, and down markedly from the gains in the two previous months (+268,000 in May and +248,000 in June).

However, the household survey – which better captures startup and small business activity – pointed to job gains of 389,000 in July. As a result, the employment-population ratio moved up to 60.5 percent, which is the highest level since January 2009.

Of course, there’s still ground to be made up, as the pre-recession employment level topped 63 percent.

Meanwhile, the labor force inched forward by 105,000, leaving the labor force participation rate unchanged from the previous month at 62.9 percent. Again, the U.S. is still not back to pre-recession levels that exceeded 66 percent.

In a sense, the fact that the U.S. economy is not back to the employment and labor force participation levels hit before the last recession means that there is some labor availability to be lured back into the marketplace at least at some skill levels, which would help to alleviate some labor shortages.

Finally, we need to take a look at the latest numbers regarding self-employment, one measure of entrepreneurship in our economy. Unfortunately, in terms of incorporated self-employment, the numbers were down.

Since these numbers are not seasonally adjusted, we have to compare the data to the same time in previous years. The July level of incorporated self-employed came in at 5.545 million, which was down from 5.752 million last year. That’s now four straight months in which the level was lower than last year. For good measure, the July 2018 level was lower than what prevailed in July 2008.

As for unincorporated self-employment, which is seasonally adjusted, the July level of 9.663 million was up versus June’s 9.464 million, but still down from the levels that prevailed in each of the previous eight months. And we remain well off the recent pre-recession high of 10.86 million registered in December 2006.

So, we have a long way to go in terms of accelerating the growth in entrepreneurship, which is vital to current and future economic, income and job growth. Pro-growth tax and regulatory relief advanced over the last year and a half has served as an excellent start, while misguided  trade measures have worked at cross purposes, generating uncertainty, raising certain costs and reducing opportunity. If we get tax, regulatory and trade policies all pointed in a positive direction, the foundation for entrepreneurial, investment and economic growth will be further solidified.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.


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