On Friday morning, the Labor Department reported that the us economy added 255,000 jobs, while the unemployment rate remained at 4.9 percent. The service sector has led the way on job creation, including health care employment (+43,000), ambulatory health care services (+19,000), hospitals (+17,000), and nursing and residential care facilities (+7,000).
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The slowdown in manufacturing has cost jobs: Factory employment has fallen about 30,000 in the past year, depriving the economy of key middle-income positions. July’s job gains, combined with June’s upwardly revised total of 292,000, brought the average monthly job gain for May through July up to 190,000 despite May’s dismal showing (24,000 after an upward revision).
The US central bank described the 287,000 jobs added in June as “strong” gains, but raised concerns over “soft” business investments. In addition, average hourly earnings are expected to have increased 0.2 percent after edging up 0.1 percent in June.
Job growth in 2016 remained “well above the pace needed to maintain a low and stable unemployment rate”, said Jason Furman, chairman of the White House Council of Economic Advisers.
They also revived talk that the Federal Reserve would again raise interest rates by the end of the year.
“Today’s report helps the case for more Fed tightening before too long – if strength is sustained – although officials are being ultra cautious/dovish as they worry about downside risks”, he added.
Nonetheless, the jobs report provides encouraging news.
The second straight month of robust job gains is a boost to an economy after growth averaged a 1.0 percent annual rate in the last three quarters. The rate includes involuntary part-time workers, discouraged workers, and workers who have dropped out of the labor force but are still able to work. Through July, 78 percent of the 1.3 million jobs added have gone to women.
Some Fed policymakers have suggested that the bank should raise rates again this year if the USA economy gains more momentum.
“These job numbers are good enough to keep the Fed on track for a December rate increase despite sluggish GDP growth in the first half of this year”, said Scott Anderson, chief economist at the Bank of the West. Together, both sectors have added almost a million jobs in the last 12 months, according to the Labor Department. The mining industry continued to see losses.
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Among the major worker groups, unemployment rates in July were little changed for adult men (4.6%), adult women (4.3%), teenagers (15.6%), whites (4.3%), blacks (8.4%), Asians (3.8%) and Hispanics (5.4%). The jobless rate increased for adult men, Asians and people over 55 last month.
