The rate of US job losses fell in July while the unemployment rate surprisingly fell. Nonfarm payrolls dropped by 247,000 in July, the Labor Department said, the smallest dip since last August and below the 275,000 decline expected by economists. The unemployment rate, calculated using a survey of households as opposed to companies, dropped  0.1 percentage point to 9.4 percent. The broad measure of unemployment, including part-time workers seeking full-time jobs and discouraged workers who quit the market, fell to 16.3 percent.

In July, the number of unemployed persons was 14.5 million. The unemployment rate was 9.4 percent, little changed for the second consecutive month. Among the major worker groups, unemployment rates for adult men (9.8 percent), adult women (7.5
percent), teenagers (23.8 percent), whites (8.6 percent), blacks (14.5 percent), and Hispanics (12.3 percent) were little changed in July. The unemployment rate for Asians was 8.3 percent, not seasonally adjusted.

The number of long-term unemployed (those jobless for 27 weeks or more) rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemployed persons were jobless for 27 weeks or more

The civilian labor force participation rate declined by 0.2 percentage point in July to 65.5 percent. The employment-population ratio, at 59.4 percent, was little changed over the month but has declined by 3.3 percentage points since the recession began in December 2007.

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in July at 8.8 million. The number of such workers rose sharply in the fall and winter but has been little changed for 4 consecutive months.

About 2.3 million persons were marginally attached to the labor force in July, 709,000 more than a year earlier. (The data are not seasonally adjusted.) These individuals, who were not in the labor force, wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 796,000 discouraged workers in July, up by 335,000 over the past 12 months. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other 1.5 million persons marginally attached to the labor force in July had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

From May to July, job losses averaged 331,000 per month, compared with losses averaging 645,000 per month from November to April. Since December 2007, payroll employment has fallen by 6.7 million.

Employment in construction declined by 76,000 in July, about in line with the average for the past 3 months (-73,000). Employment had decreased by 117,000 a month on average from November to April. Manufacturing employment fell by 52,000 in July and has declined by 2.0 million since the recession began. In motor vehicles and parts, fewer workers than usual were laid off in July for seasonal retooling. As a result, the estimate of employment for the industry rose by 28,000 after seasonal adjustment. In large part, July's seasonally-adjusted increase reflects the fact that previous job cuts had been so extensive that there were fewer workers to lay off during the seasonal shutdown. Elsewhere in manufacturing, several industries continued to lose jobs in July, including machinery (-15,000) and fabricated metal products (-14,000).

In July, retail trade employment declined by 44,000. Job losses in the industry had averaged 27,000 per month over the prior 3 months. Employment in wholesale trade fell by 19,000 in July, with the majority of the decline occurring among durable goods wholesalers.

Employment in professional and business services continued to trend down in July (-38,000); the industry has shed 1.5 million jobs since the start of the recession. Within professional and business services, employment in the temporary help industry edged down in July. While temporary help has lost 844,000 jobs since the recession began, the declines have lessened substantially over the past 3 months.

Transportation and warehousing lost 22,000 jobs in July. Since May, the average monthly job loss was half the average monthly decline for November through April (-17,000 versus -34,000). Financial activities employment continued to trend down in July (-13,000). The average monthly decline for this industry was 23,000 over the past 3 months compared with 46,000 per month from November through April. Since the start of the recession, the financial activities industry has lost 501,000 jobs. Employment in information declined by 16,000 in July, including losses in publishing and telecommunications.

Health care employment increased by 20,000 in July, about in line with the average monthly gain for the first half of this year but down from an average monthly increase of 30,000 during 2008. Employment in leisure and hospitality has been little changed over the past 3 months.

In July, the average workweek of production and nonsupervisory workers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours. The manufacturing workweek increased by 0.3 hour to 39.8 hours.

Factory overtime was unchanged at 2.9 hours.

In July, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 3 cents, or 0.2 percent, to $18.56. Over the past 12 months, average hourly earnings have increased by 2.5 percent, while average weekly earnings have risen by only 1.0 percent due to declines in the average workweek.

The change in total nonfarm payroll employment for May was revised from -322,000 to -303,000, and the change for June was revised from -467,000 to -443,000.