The number is above the department’s expected job growth number of approximately 180,000 jobs last month. Wage growth also topped expectations, and year-on-year average hourly earnings are at a post-recession high of 2.6%. So the Federal Reserve has no room to raise interest rates and slow down housing recovery or risk a rising dollar hampering the competitiveness of USA manufacturing. Since the United States central bank hiked interest rates for the first time in a long time last December, it has sat on its hands as global economic growth sputtered.
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With the dollar’s rebound after the jobs report and the uptick in short-term interest rates, the markets are likely to “price back in” the chances of the Fed raising rates in both September and December.
“As the labour market continues to tighten, I think we will see wage growth further accelerate”, said Gus Faucher, deputy chief economist at PNC Financial Services Group in Pittsburgh.
The likelihood of another rate hike from the Federal Reserve by the end of the year rose in the Fed funds futures market.
That would be below June’s surprisingly large gain of 287,000. Some economists pointed to odd weather patterns, a listless global economy and market turbulence early this year.
The construction industry’s unemployment rate in July reached 4.5 percent, the industry’s lowest unemployment rate since October 2006.
Last week’s Commerce Department data showed the economy expanded in the second quarter at a 1.2 percent annualized rate, less than half the median projection by economists surveyed by Bloomberg. Turning points are always harder to measure, and it seems like we’re always turning. Fed Chair Janet Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with population growth.
Gains were strongest in professional and business services, with 70,000 new jobs added, and in health care, where 43,000 new jobs added.
However, employment in leisure and hospitality added 45,000, while food services and drinking places added 21,000.
The number of employed Latino workers increased from 25.1 million in June, to 25.3 million. Participation numbers have been hovering near the lowest levels in nearly 40 years, partly because the Baby Boom generation is retiring but also because some younger workers have given up on finding a job. To some extent, that decline is normal given that hiring slows the closer the U.S.is to full employment.
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A solid gain in payrolls would add to July auto sales in underscoring the economy’s sound fundamentals. At the same time, companies seem to prefer to hire more workers for now rather than invest in new equipment and increase their efficiency and output.
