The U.S. economy added a greater number of jobs than expected during July as food service workers returned in droves and helped the broader leisure and hospitality sector add more than half a million positions.
The Labor Department reported Friday that payrolls increased by 1.763 million in July, above the 1.48 million estimate that economists polled by Dow Jones had expected. The unemployment rate fell to 10.2%, also better than the 10.6% forecast.
CNBC studied the net changes by industry for July jobs based on data contained in the employment report.
Leisure and hospitality showed the strongest hiring numbers. A torrent of hiring in the food services industry was almost solely responsible for the blowout jobs number in the sector as restaurants added back to payrolls chefs, waitstaff and bartenders.
The food services and drinking places subsector alone saw a net gain of 504,000 jobs and helped push the sector up 592,000 for the month. Other amusement, gambling and recreational workplaces added 99,600 jobs.
James Knightley, chief international economist at ING, said the U.S. service sector showed some of the strongest resilience.
“The details show that the service sector saw most of the gains with leisure/hospitality up 592k, trade and transport rising 291k, retail up 258k and business services up 170k,” he wrote. “Despite these impressive gains we have to remember the number of people in work is still 12.88 [million] lower than February. There is still a mountain to climb.”
Government and retail trade also posted far larger than normal job gains as state and local positions were filled and brick-and-mortar shops began to reopen as coronavirus closures lifted across the country. Those two sectors netted 301,000 and 258,000 jobs, respectively.
“In July, notable job gains occurred in leisure and hospitality, government, retail trade, professional and business services, other services, and health care,” the Labor Department said in a release. “These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it.”
The health-care subsector added 126,000 jobs, with employment growth in offices of dentists (+45,000), hospitals (+27,000), offices of physicians (+26,000), and home health-care services (+16,000). Employment in health care is down by 797,000 since February.
The broader health-care and social services sector added 191,000 jobs.
The manufacturing sector, a key priority for President Donald Trump, added a modest 26,000 jobs.