Texas Led Payroll Increases in 36 U.S. States in July

Payrolls climbed in 36 U.S. states in July, showing labor-market strength was broad-based.

Texas led the nation with a 46,600 increase in payrolls, followed by California with 27,700 more jobs, figures from the Labor Department showed today in Washington. The jobless rate increased in 30 states.

Improvement in the labor market could boost household spending, helping economic growth into the second half of the year. The data also support the Federal Reserve’s plan to keep scaling back its unprecedented stimulus program, and come before policy makers meet in Jackson Hole, Wyoming later this week to discuss labor market dynamics.

“We’ve had good job growth,” Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, Pennsylvania, said in an interview before the report. “Given the jobs we’ve got,” and stronger consumer balance sheets and confidence, “the back-to-school sales season will turn out to be fairly good.”

The unemployment rate rose the most in Tennessee, increasing to 7.1 percent from 6.6 percent in June.

Mississippi had the highest jobless rate in the country at 8 percent. North Dakota had the lowest at 2.8 percent.

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, making the national figures more reliable, according to the government’s Bureau of Labor Statistics.

Employment Gain

In today’s report, Michigan was among other states showing significant gains in employment. The largest declines in July were registered by Ohio, Maryland and South Carolina.

The data on state jobs is consistent with a report earlier this month that showed U.S. payrolls climbed 209,000 in July following a 298,000 advance in June, capping 6 months of above-200,000 job gains. The nationwide unemployment rate ticked up to 6.2 percent from 6.1 percent as people reentered the workforce.

Improvement in cities remains uneven, with tight labor markets in some metros pushing wages higher. Seventy-four of 372 metro areas reported jobless rates below 5 percent in June, Labor Department figures showed last month. At the same time, 10 areas had jobless rates of at least 10 percent.

Fed policy makers last month said economic conditions have improved as the unemployment rate falls, though “a range of labor market indicators suggest that there remains significant underutilization of labor resources.”

The Federal Open Market Committee pared its monthly asset-buying to $25 billion at its July 30 meeting. Fed officials led by Chair Janet Yellen are stepping up a debate over when to raise interest rates for the first time since 2006 as joblessness falls and inflation picks up toward their 2 percent goal.

To contact the reporter on this story: Jeanna Smialek in Washington at jsmialek1@bloomberg.net

To contact the editor responsible for this story: Carlos Torres at ctorres2 @bloomberg.net

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