Economists had expected a growth of about 180,000 jobs in July and for the unemployment rate to reach 4.8%.
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“The July jobs report was everything you could have asked for and more. Wages and labor force participation are also up, which is another sign that the USA economy is moving in the right direction”.
The job figures are being closely monitored by the Federal Reserve as it weighs another interest rate hike.
The Commerce Department said last month that economic activity had grown by a paltry 1.2 per cent in the second quarter – data at odds with Friday’s rosier jobs report. Along with the upward revisions to temporary employment gains for May and June, temporary staffing gets a healthy bounce in its y/y growth rate, which has been locked in a downtrend since late-2014.
“Today’s payroll number for July was another very positive sign of the us economy’s strength”, said Tony Bedikian, managing director of global markets at Citizens Bank.
Fed policymakers’ decision last week to leave interest rates unchanged was accompanied by affirmation that risks to the USA economy have eased and the job market has continued to tighten – all suggesting that a boost in borrowing costs at their next gathering September 20-21 remained on the table before Friday’s Labor Department data. Fed chair Janet Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with population growth. In July, despite its expectations that the job market would continue to strengthen, the Fed chose to leave the United States interest rates unchanged for the fifth time this year.
Dudley said that it is premature to rule out further monetary policy tightening this year and warned that market expectations may be putting insufficient weight on the possibility that the economy could outperform expectations. The year-over-year rise was 2.6 per cent in July, the same as in June.
The U.S. central bank raised interest rates for the first rise in almost a decade last December, but since then has held rates steady amid concerns over persistently low U.S. inflation and a global economic growth slowdown.
“We believe the trend remains more than strong enough to keep the unemployment rate declining over time”, said Jim O’Sullivan of High Frequency Economics.
The payrolls data added to July auto sales in underscoring the economy’s sound fundamentals.
But with the bulk of labor market slack largely absorbed and the economy’s recovery from the 2007-2009 recession showing signs of aging, payroll gains will probably drift lower over the next 12 months, economists say.
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. Construction payrolls rose 14,000 following three consecutive months of declines.
The US central bank described the 287,000 jobs added in June as “strong” gains, but raised concerns over “soft” business investments. Weak growth overseas and a stronger dollar have cut into many companies’ overseas businesses.
NCLR speculated Latino workers benefited from the addition of 45,000 hospitality jobs in July.
It is not unusual for the carmakers to shut down their plants for a week or two in July due to a slowdown in demand. Government positions rose 38,000, the most in more than a year.
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The labor force participation rate for Latinos, which counts all people 16 years old and older who are able to work, slightly increased from 65.6 to 65.8 percent.
