08/03/2012 03:33 pm ET Updated Oct 03, 2012

Jobs Report: A Wider Perspective

The release of the jobs report, a monthly ritual for economy watchers, offered a mixed picture this morning. The good news was that the U.S. economy created 166,000 new positions in July, according to the Bureau of Labor Statistics (BLS). That's an improvement from the dismal figures reported in April, May and June. The bad news was that unemployment actually edged up a bit in July to 8.3 percent of the labour force, from 8.2 percent in June.

The arcane details of this key indicator -- which is actually based on separate surveys of businesses and households -- help keep financial analysts employed and enliven discussion on cable business channels. But one key to reading the jobs report is to step back and take a bit of perspective.

Looking at the year so far, the economy has managed to create an average of 151,000 jobs per month. That's about the break-even level we need to keep up with the natural increase in the U.S. population. Also, the unemployment rate is back to the same 8.3 percent level where it stood in January. That means that the jobs market is neither improving nor deteriorating; it's stagnant.

The same picture emerges from another report, the ADP employment report, which typically comes out two days before the government statistics. The latest release counted 163,000 new jobs in July, exactly the same as the BLS. ADP's monthly figures are a bit less volatile than the BLS's, but they too show similarly weak job creation: an average of 170,000 new posts per month this year.

Job creation will probably remain unimpressive in the next handful of years, during which the Economist Intelligence Unit expects the U.S. economy to grow by an annual average of only 2.2 percent. The key problem is that consumers and the government ran up too much debt in the last decade and will need a sustained period of belt-tightening to reduce it. Their saving, though necessary, means they won't be spending. Companies in general are cash rich, but are reluctant to invest when demand is so weak for their goods and services.

This slump has been toughest on certain groups: the young, less educated, Blacks and Hispanics. Happily, the latest jobs numbers show that unemployment rates for these groups have come down substantially in the past year.

The latest data also offer some lessons for those just coming into the labor force, or finding themselves out of work in the middle of a career. Government at all levels continues to shed jobs and the construction sector is making only a tepid recovery from the devastation of the 2008-2009 recession. These aren't the hot places to look for work.

By contrast, the healthcare sector is booming, and will likely continue to do so if Obamacare moves forward following the November elections. The plan will bring tens of millions of Americans into the health insurance system. They'll want more care delivered by more nurses, doctors, X-ray technicians and so on. Office work in general is expanding as well (the BLS calls this "professional and business services").

It's also a good idea to stay in school, or go back for additional training. Workers without a high-school diploma are unemployed at a rate three times higher than those with a bachelor's degree (12.7 percent versus 4.1 percent). Those numbers should offer some solace for this summer's crop of new college graduates.