The US economy saw robust job creation in July, largely surpassing analyst expectations, while the unemployment rate remained stable at 4.9 per cent, the Labor Department reported on Friday (Aug 5).
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The rate of unemployment did not change remaining at its June rate of 4.9%, as more individuals enter the labor market.
Economists have forecast that employers added 175,000 jobs in July and that the unemployment rate dipped to 4.8 percent from 4.9 percent in June.
Employment gains in the month of July were led by the consistently productive professional services and healthcare sectors, as well as by a second consecutive month of above-trend jobs growth in leisure & hospitality.
A report from the Labor Department that said employers added 255,000 jobs in July had been eagerly anticipated on Wall Street, in Washington and on the campaign trail, and the much-better-than-expected showing immediately rippled through all three arenas. The growth in employment for June-a very good month-was revised from a gain of 287,000 jobs to one of 292,000, marking an exceptionally strong month.
Stocks jumped Friday to record highs, and most economists said last month’s gain of 255,000 payroll jobs squelched fears that had been generated by slow growth in the second quarter. Highlighting job market strength, average hourly earnings increased a healthy eight cents and workers put in more hours. That would fall well shy of last year’s 2.6 percent growth rate and amount to the weakest pace of economic output since 2013, when GDP slid to 1.7 percent. The Federal Reserve is looking for stronger pay increases and inflation before lifting interest rates again. Duncan said “the report gives support to those on the Fed hoping to increase rates this year, especially if the numbers are supported in future releases”.
Most economists do not expect the Federal Reserve to raise interest rates before December. That lifted the annualized rate of wage growth to 2.6 percent, the fastest since the recession ended in June of 2009.
America’s mining sector lost 6,000 jobs in July.
But economist Paul Ashworth of Capital Economics says “Fed officials will want to see more evidence of a pickup in (economic) growth” before hiking rates.
The American job market remains the nation’s bright spot even as parts of the US economy are flashing warnings signs.
The average work week for all workers also increased by six minutes to 34.5 hours in July from 34.4.
Between the boost in new jobs and the revisions to the last two months, the report is significantly stronger than had been anticipated.
Manufacturing sector employment increased by 9,000 jobs in July after adding 15,000 positions in June.
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All those measures have improved a bit in recent months, but they show an economy that is still recovering from the recession that officially ended more than seven years ago.
