Although the payroll gains slowed this year compared to an average of more than 200,000 per month over the course of 2015, “even 150,000 job gains per month would be consistent with gradually using up any remaining slack present in the USA labor market”, William Dudley, president of the Federal Reserve Bank of NY and a close ally of Federal Reserve Chair Janet Yellen, said recently.
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Stocks had their best day in nearly a month Friday as major indexes closed at record highs after a strong jobs report boosted investors’ confidence for continued economic growth.
The economy added 255,000 jobs in July, after adding 292,000 in June. Wages have increased 2.6 percent from one year ago. Workers also worked more hours during July.
These measures include investing in infrastructure, implementing the high-standards Trans-Pacific Partnership (TPP) deal, raising the minimum wage, and guaranteeing access to paid parental leave, he said.
Stocks are rallying after the July jobs report came in much better than expected.
Government employment showed signs of life in July, rising 38,000.
In June, the U6 fell to 9.6%, the lowest level since 2008, but still far above the pre-recession lows. The dollar has nevertheless weakened 2.4% over the past year after briefly spending time above 100 in March and November last year. The brisk pace of hiring represents a turnaround from weak job growth in the first half of this year, including disappointing job gains in April and May. Its stock climbed $1.15, or 5.5 percent, to $22.18. “The combination suggests at least some of the factors behind slow economic growth are structural and won’t be overcome by additional monetary stimulus”.
Women have been receiving a solid majority of the new jobs this year, boosted by robust hiring in health care and education.
Many analysts expect the economy to rebound in the second half of the year, with one of the most optimistic estimates coming from the Federal Reserve Bank of Atlanta: It predicts that annualized growth will reach 3.7 percent in the current July-September quarter.
The problem is that economic activity, according to the most recent indications, remains subdued. Americans are confident enough to step up home purchases, aided by near-record-low mortgage rates.
Services companies, which range from retailers to banks to shipping firms, expanded at a healthy pace in July, according to a survey by the Institute for Supply Management, a trade group. Their expansion slowed a bit from the previous month. But new orders picked up, a sign that growth could remain healthy.
But manufacturing continues to struggle and is weighing on hiring. That marks a change from earlier this year, he said, when investors anxious the US would fall into a recession and tech companies would suffer as businesses cut spending.
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GDP in the USA grew at an annual rate of only 1.2%, according to an advance estimate released last week. This suggests that U.S. economy still has the chance to witness expansion in years to come.
