Job growth in July is a sign of progress

U.S. payrolls grew by 209,000 jobs in July - less than expected, but still enough to begin to erase the jobs deficit created by the recession, the U.S. Labor Department reported Friday.

Even the rising unemployment rate, which ticked up by a tenth of a point to 6.2 percent, is an indicator of growth.

That's because, to count as unemployed, a jobless person must actively be seeking work.

As employment prospects improve, some people who had been sitting on the sidelines may reenter the labor market and start sending out resumés, but may not immediately find work.

Although the jobs report looks good, it brings scant comfort to the 6,500 casino workers soon to be laid off in Atlantic City and the 600 pharmaceutical employees at Merck & Co. facilities in West Point and Lansdale.

And, unlike people laid off two years ago at this time, the newly unemployed will only be able to collect six months of unemployment benefits, compared with more than a year's worth of help available earlier.

One in three people who lose their jobs remain unemployed after six months, the U.S. Labor Department reported.

The report showed job growth in nearly every sector, although the education and health-care sectors - key components of the Philadelphia-area economy - showed some sign of weakness.

Nationally, the "eds and meds" sector, as it is known, added 17,000 jobs, with big boosts of 40,000 jobs in social services and ambulatory health care. But those gains were offset by losses of 14,300 jobs in hospitals and nursing homes.

"If there is any prolonged weakness in eds and meds, it's bad for our region," said Ryan Sweet, director of economic research at Moody's Analytics in West Chester.

They are a "critical cog that holds our regional economy together," he said.

Sweet said the Philadelphia economy rarely improves in a straight line, but has added enough strength in recent years to help it better withstand coming job losses in the pharmaceutical and casino industries.

"The Merck and casino layoffs are problematic," he said, "but I think the economy is big enough to absorb it."

Sweet said the report showed excellent progress, adding that wage growth should improve as the job market tightens up.

According to the report, construction added 22,000 jobs and manufacturing grew by 28,000 jobs overall, although there were some losses in food manufacturing, printing, and electrical equipment.

Retailing showed solid growth with 26,700 jobs, although there were 3,400 fewer jobs in sporting goods, hobby, book and music stores.

In finance, gains in securities and insurance were offset slightly by job loss in credit activities.

Government hiring was also up.

Even with the increase in hiring, unemployment remains high for African Americans at 11.4 percent. Also, one in five teenagers, aged 16 to 19, who want work cannot find it.