The share of prime working-age Americans with jobs in July was greater than its been any time since the last recession.
The share of the 25- to 54-year-old population with jobs, known as the prime age employment-population ratio, rose to 79.5 percent in July, according to data from the Federal Reserve. That is the highest level since May of 2008.
The employment-population ratio for Americans of over the age of 16 grew to 60.5 percent on Friday. The ratio, which plummeted from 62.7 percent to 58.2 percent between December 2007 and July 2008, has recovered to its highest level since the Great Recession. That rise is particularly impressive because the aging of the American population exerts constant downward pressure on the ratio.
The U.S. economy added 157,000 jobs in July and the unemployment rate ticked down to 3.9 percent from 4 percent, the Labor Department said Friday. That’s near the 18-year low of 3.8 percent reached in May.
Employers added an average of 224,000 new workers in the first six months of this year, a faster pace than in 2017. The pickup has impressed many economists because it’s coming late in the economic expansion, which has entered its 10th year and is now the second-longest in U.S. history.
The slip in hiring last month may be temporary. The jobs figures for the two prio0r months were revised sharply upward. And job growth was depressed by the loss of 32,000 in toy and hobby shops, likely due to the closing of Toys R Us. Consumers are spending freely and businesses are stepping up their investment in buildings and equipment, accelerating growth. That’s raising demand for workers in industries ranging from manufacturing to construction to health care.
The economy expanded at a 4.1 percent annual rate in the April-June quarter, the strongest showing in nearly four years. Average hourly pay gains remained modest, increasing 2.7 percent from a year earlier, the same as the previous two months. Manufacturers, among the most directly affected by the import taxes, added 37,000 jobs, the most in seven months.
Manufacturers have likely benefited from oil and gas drillers nearly doubling their investment in drilling rigs and other structures this spring. That’s likely boosted factory output of steel pipe and other drilling equipment. The new spending follows a 60 percent jump in oil prices in the past year.
Companies say they are struggling to find workers, with job openings higher than the number of unemployed for the first time in decades. Many firms appear to be giving part-time workers longer hours. The number of part-time workers who would prefer full-time work has fallen nearly 13 percent in the past year and now stands at 4.6 million. That’s the fewest in 11 years.
And the underemployment rate — which includes discouraged workers no longer searching for work, as well as involuntary part-time workers — dropped to 7.5 percent, the lowest in 17 years, from 7.8 percent. Lower-skilled workers are also benefiting from companies’ demand for labor. The unemployment rate for those without a high-school diploma fell to 5.1 percent, the lowest on record.
The economy is projected to grow at about a 3 percent pace for the rest of the year, which would likely mean that growth for all of 2018 would top 3 percent for the first time since 2005. Strong demand from consumers and businesses sharply reduced the stockpiles of goods held on many store shelves and warehouses. Rebuilding those inventories will require additional factory output, potentially lifting growth in the third and fourth quarters.
The Associated Press contributed to this report.