The unemployment rate was unchanged at 4.9 percent as more people entered the labor market. May’s payrolls were revised up to 24,000 from the previously reported 11,000.
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“It looks like a pretty strong report overall”. It shows the economy from a labor perspective is heading in the direction that the Fed wants.
“It puts to bed a lot of the concerns that had risen up after the May report that we had come to a screeching halt in the job market”, said Curt Long, chief economist at the National Association of Federal Credit Unions.
The dollar rose to 101.75 yen from 101.17 yen and the euro fell to $1.1091 from $1.1127. The Dow and the S&P 500 are now higher for the week, while the Nasdaq extended its gains. Economists surveyed by CNNMoney project that America added 182,000 jobs last month and that unemployment dipped down to 4.8%.
July’s employment numbers were strong across most major industries. The financial services sector added another 18,000 jobs.
EYES ON THE FED: The Federal Reserve has been saying for months that it intends to raise interest rates if the economy is strong enough to warrant it. July’s report provides more evidence the economy is doing well, making a boost in interest rates more likely. Most analysts expect the solid hiring to help fuel an economic rebound in the second half of this year. Stocks made their biggest gain in nearly a month. Several indicators make a rate hike very possible before the end of the year.
After June’s report, the officials were already confident that the employment rates would remain healthy in the country alongside some increase in labor utilization. The unemployment rate had been expected to edge down to 4.8 percent. “What you’ve got is a lot of people being left out of the upturn”, he told CNBC.
Wage growth offered more promising signs of acceleration, with average hourly earnings rising a more-than-forecast 0.3% from a month earlier, the most since April, to $25.69. Average hourly earnings have increased 2.6 percent over the course of the year, according to the Bureau of Labor Statistics. Cutbacks in business spending have also been blamed for the lower-than-expected growth in GDP during the three months ending on 30 June. And manufacturers, still buffeted by a weak global economy and the oil industry downturn, added 9,000 jobs in a sign the sector may be stabilizing.
And Barclays Economist Jesse Hurwitz wrote in a note to clients, “With job gains back near the cycle average of 200k, we now see lower recession risk for the United States over the next 12 months”.
The Labor Department pointed to notable job growth in the professional and business services, health care and social assistance, and leisure and hospitality sectors. Job gains for May and June were revised up a bit too. The employment numbers tend to be a little more accurate in that sense, so despite the Brexit referendum and all those headlines, the jobs data suggest the economy is chugging along just fine.
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Other details of the employment report showed a rise in the labour force.
