Economists had forecast non-farm payrolls increasing 223,000 last month and the unemployment rate holding steady at 5.3 per cent. One broader baseline than size of the labor force is the set of all people who report that they “currently want to work”, since 2-3 percent of the population reports wanting a job but are not considered part of the labor force.
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The MSCI Emerging Markets Index declined 0.8 percent to the lowest in two years, after benchmark gauges in Malaysia, Poland, Russian Federation and Taiwan dropped more than 1 percent.
Industries seeing major jobs gains included retail trade, up 36,000; health care, which added 28,000 jobs; and professional and technical services, which added 27,000 positions. Economists had expected wages would rise slightly, 0.2% in July from June. Assuming that the relationship between the establishment and household employment measures held fairly steady during the reference period, the latter series probably expanded by 210,000, more than offsetting the surprising 56,000 contraction recorded in June.
“The understanding that the report was not decidedly weak is apt to keep the Federal Reserve on a desired track to raise the fed funds rate soon – and most likely in September in our estimation”, said Patrick O’Hare at Briefing.com.
The Fed last month upgraded its assessment of the labour market, saying it was continuing to “improve, with solid job gains and declining unemployment”. “This week’s employment report will be reviewed to confirm or dismiss the softness signaled in employment cost”.
Job growth last month roughly matched expectations, and the early reaction on the New York Stock Exchange before trading opened was muted.
“If the market was looking for an excuse for Janet Yellen to hold off on raising interest rates, they really don’t have one”, says Karyn Cavanaugh, senior market strategist at Voya Investment Management.
An interest rate hike by the US Federal Reserve Board offers better yields to investors who place their bets on the American currency and US treasury bills.
Average hourly earnings of private-sector workers rose 5 cents, or 0.2 per cent, last month to $US24.99. A report yesterday on the services industries showed the fastest growth in a decade.
First-time claims for unemployment benefits rose slightly to 270,000 for the week ending August. 1, the Department of Labor reported Thursday.
Monthly job growth has averaged 211,286 so far this year, indicating that employers are confident that the six-year recovery from the recession can sustain strong consumer demand and require more workers.
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There continues to be evidence that the job market is not fully healed, despite its impressive improvement over the past three years. But average hourly wage growth of 2.1 over the past year has barely exceeded low inflation. The mining sector has lost 78,000 jobs since December.
