Jobless Rate Steady, but More Manufacturing Jobs Shed

The U.S. unemployment rate held steady at 4.5% in July, the Labor Department said on Friday, but the manufacturing sector continued to lose jobs.

Manufacturing shed 49,000 jobs in July, bring the total job loss to 837,000 during the past year. However, the loss was less than half the number dropped in each of the prior three months.

This sector accounts for about 20% of U.S. economic production and is one of trucking’s largest and most important customer segments

Businesses eliminated a total of 42,000 jobs in July after a loss of 93,000 in June. Analysts were expecting the jobless rate to rise to 4.7%, according to the Associated Press.

Since employment levels drive so much economic activity, a slide in the job market can further weaken consumer confidence and spending patterns. It also shows that many businesses are still retrenching, which can further cut into freight shipments.

Reuters reported that some economists worry that if the employment climate worsens and consumers cut back, it could tip the country into recession.

That is a main reason why this report will likely increase pressure on the Federal Reserve to trim interest rates for a sixth time this year when it meets on Aug. 21.

The report showed that the service sector added 5,000 jobs, the weakest showing since August 2000, while larger gains were posted in health services and in engineering and management services. Employment in construction was little changed.

Labor also said that average weekly hours worked were unchanged at 34.2 and average weekly earnings rose to $490.77 during July from $489.40 in June.

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