July’s employment data shows a return to equal growth in both intangible and tangible producing industries.
The US employment growth machine continued in July with the Bureau of Labor Statistics reporting an unexpectedly high increase in jobs of 528,000. The biggest gains in intangible-producing industries were in Professional and Business Services (up 82,100), Educational & Health Services (up 103,800), and Government (excluding Postal Service) (up 54,800). For tangible-producing industries, the higher level of employment was due primarily to increases in Accommodation & Food Services (up 73,900) and Trade, Transportation & Utilities (up 54,000). Construction & Mining (up 39,000) and Manufacturing (up 30,000) also contributed to the growth.
A couple of months ago I reported that the May data showed a large difference in employment in tangible-producing industries versus intangible-producing industries. That was a change from the previous trend where the two parts of the economy have grown (or declined) at pretty much the same rate (see chart below). The July data shows only a slightly faster employment growth in the intangible-producing industries compared to tangible producing industries. Thus, it looks like the trend of relatively equal growth started at the end of the Great Recession will continue. That being said, we continue to see employment volatility within specific industries.
For more on the categories, see my explanation of the methodology in an earlier posting