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July Job Numbers Paper Over a Scary Trend



According to the Bureau of Labor Statistics, the U.S. economy added 255,000 non-farm payrolls in July, beating market expectations of 185,000, and posting back-to-back 250,000+ monthly additions. The private sector added 217,000 workers. The unemployment rate stayed at 4.9%.

July’s report is eerily similar to last month’s print. In both months, Dent Research found that a slight majority (109,000 vs. 108,000) of jobs were added below the measured median wage. And just as in June, the vast majority of jobs went to the highest and lowest-paying industries, leaving the middle class behind.

Professional and technical services added 37,400 workers last month, the most of any of our 84 major industries. These jobs pay an average of nearly $40 per hour. On the lower end, administrative and support services added 31,300 workers ($19 per hour). Bars and restaurants hired 21,200 ($13 per hour).

In the middle third of our wage scale, specialty trade contractors posted the biggest gain, with 9,400 hires. Educational services, another middle-class industry, shed nearly 14,000 workers. This middle third continues to stagnate, accounting for just 7% of net job additions in July.

Dent Research President and Index creator Rodney Johnson commented: “We’ve had two months in a row of solid job gains. But adding the bulk of the new hires at the top and the bottom end of the wage scale while leaving out the middle class will continue to weigh our economy down.”

Each month Dent Research produces detailed charts depicting where the job additions fall along the wage scale:

See larger image

See larger image

The Dent Research Employment Index digs beneath the BLS’ headline numbers to measure the quality of jobs added each month. It provides a more complete picture of the job market by tracking where jobs are being created along the wage scale. For a more detailed explanation of our methodology, please click here to view our employment white paper.


About Dent Research

Dent Research is an economic forecasting and investment research firm and publisher that works diligently to provide you with the proprietary economic knowledge you need to accurately forecast what lies ahead in our economy so you can take the necessary and appropriate action to ensure prosperity in your business, investment and financial affairs.

The core of our work is what we call the Dent Method, which our founder and economic expert, Harry S. Dent Jr., developed in the late 1980s. It has the only documented record of success at forecasting long-term economic trends based on the study of and changes in demographic trends and their impact on our economy and the markets. It works by showing how predictable consumer-spending patterns, when combined with demographic trends, allow us to forecast the economy years or even decades in advance.

For more than two decades, readers and experts have trusted our independent economic think tank and research team to provide specialized and proprietary economic and investment research, analysis tools, and forecast information.

With Dent Research, investors and businessmen alike can learn how to recognize and potentially profit from economic and demographic cycles. They can also use our research to pinpoint the best growth industries, the best places to live, the hottest investment sectors, and the key technologies that will change everyday lives.