The U.S. economy added a surprisingly robust 255,000 net jobs in July and wages showed strong gains, the Labor Department said Friday, easing fears the labor market was stumbling seven years into the recovery from the Great Recession. Economists expected an addition of 185,000 jobs and an unemployment rate of 4.8 percent, according to Forbes.
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Last month’s biggest job gains were in professional and business services (70,000), leisure and hospitality (45,000), health care employment (43,000), government employment (38,000) and financial activities (18,000).
Manufacturing sector employment increased by 9,000 jobs in July after adding 15,000 positions in June.
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 to average between 150,000 and 160,000 jobs per month later this year, economists say.
In June, 292,000 jobs were added compared to the anemic 24,000 jobs created in May.
Average hourly wages rose by a healthy eight cents to $25.69, that is up 0.3 percent from a month earlier, which should help to underpin consumer spending. 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.
America’s job market remains one of the few bright spots in the economy.
The only fly in the ointment, Bandholz and other economists said, was the under-employment rate, which rose from 9.6 percent to 9.7 percent. The BLS also revised upward the number of temp jobs in June to 2.91 million from the initially reported 2.90 million. Job gains in the past three months have averaged 190,000 per month. Strong July employment report after healthy June numbers suggest that the May numbers were highly unusual.
Between the boost in new jobs and the revisions to the last two months, the report is significantly stronger than had been anticipated. The unemployment rate, which is derived from a separate Labor Department survey of households, was little changed as employment climbed by 420,000, more than making up for the 407,000 increase in the labor force.
Local July jobless numbers won’t be available for several weeks, but in June, unemployment rose in Springfield to 8.1 percent following months of steady decline.
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The signs of strength in the labor market, particularly the increase in wage growth, might become one important factor in the presidential election this November, given the voter frustrations with the growth or lack of in the economy that has left behind many from the country.
