There were 255,000 jobs added to the us employment pool in July, the Labor Department reported Friday.
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Analysts also noted that recent college graduates are finding jobs, one indicator of robust hiring. Investors cheered the better-than-expected showing.
At 8:42 a.m., the Dow Jones Industrial Average was up 135.31 points, or 0.74 percent, at 18,487.36.
Business and professional firms led the way, adding 70,000 jobs.
The data in the July employment report were not only uniformly strong in their internal components, but the prior month’s jobs data were revised upward, ruling out the risk of a recession in the near-term. Average hourly earnings have increased 2.6 percent over the course of the year, according to the Bureau of Labor Statistics.
The central bank raised interest rates at the end of a year ago for the first time in almost a decade, but has held them steady since amid concerns over persistently low inflation.
“This deceleration from last year’s 200,000-plus pace should not be unexpected as the economy has moved closer to full employment”, Federal Reserve Bank of Dallas president Robert Kaplan said in a speech earlier this week, the Wall Street Journal reported.
Stocks jumped Friday to record highs, and most economists said last month’s gain of 255,000 payroll jobs squelched fears that had been generated by slow growth in the second quarter. The year-over-year increase in the average hourly wage was 2.6 percent.
Fed officials held off on a rate hike in June partly because of the surprisingly weak job growth the previous month, in addition to concerns about the referendum in which Britain made a decision to leave the European Union. In total, the economy has added 1.3 million jobs since December of past year. That’s a healthy improvement but still a slightly slower pace than previous year, when it had gained about 1.6 million jobs by this point. Many economists believe the labor market provides a more accurate picture of the economy than gross domestic product, which can be hard to measure.
“Job growth is as solid as it can be given the tightness of the labor market”, says economist Joel Naroff of Naroff Economic Advisors. He expects average additions of 175,000 to 200,000 a month the rest of the year. Construction payrolls rose 14,000 following three consecutive months of declines.
The problem is that outside the job market, things are looking gloomy.
A tighter job market would also be expected to push up wages as employers compete over a diminishing pool of workers.
Mining employment continued to fall as the industry shed 6,000 jobs during the month.
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Still, he said that “more work remains to sustain faster wage growth and to ensure that the benefits of the recovery are broadly shared, including investing in infrastructure, implementing the high-standards Trans-Pacific Partnership, raising the minimum wage, and guaranteeing access to paid parental leave”.
