U.S. employment rose at a solid clip in July and wages rebounded after a surprise stall in the prior month, signs of an improving economy that could open the door wider to a Federal Reserve interest rate hike in September.
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The unemployment rate stayed the same at 5.3%, which is its lowest point since April 2008.
The nation’s employers kept the economy humming last month by adding 225,000 jobs.
Though the pace of hiring has slowed from last year, it remains double the rate needed to keep up with population growth.
Average hourly earnings are expected to have increased 0.2 percent last month after being flat in June, putting them about 2.2 percent above their year-ago level, but leaving them well below the 3.5 percent growth rate economists associate with full employment. After all, in statement after statement, Fed Chair Janet Yellen has insisted that the FOMC will be watching economic data and will base its decision on whether to raise interest rates on the strength of that data.
The midyear jobs report is one of the hardest to adjust for season hiring patterns because of large shifts in employment in the auto industry and education, among other things.
Rising home sales helped boost construction jobs by 6,000.
Job growth in July was concentrated in the service sector, led by retail, health care, professional and technical services like computer systems design, financial activities, and at restaurants and bars.
Throughout the post-Great Recession recovery economists have anxious that overwhelming number of jobs created have been in relatively low-paying sectors of the economy, including retail and fast-food. And instead of spending their savings at the gasoline pump, consumers have mostly pocketed the additional cash. The dollar has risen about 14 per cent in value against overseas currencies in the past year, thereby cutting into exports by making U.S. goods costlier overseas.
Wages were up slightly and the number of long-term unemployed remained the same as June. But many frustrated job seekers have stopped looking for work, perhaps only temporarily.
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The participation rate still hovers near a 30-year low because improvements in the labor market are being offset by the structural headwinds of demographic change: baby boomers are retiring and young professionals are going back to school. Another 6.3 million were working part time but would have preferred full-time employment. But productivity fell at a 3.1 percent annual rate in the first three months of 2015.
