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US payrolls gains beat expectations, wages rise

USA employers added 255,000 jobs in July and the unemployment rate remained unchanged at 4.9 percent, according to the Department of Labor.

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“Employment rose in all sectors of the economy, helping to keep the rate of unemployment at 4.9 per cent amid an increase in the number of people entering the labor market looking for work”, said Chris Williamson of IHS Markit.

Economists polled by Reuters had forecast payrolls increasing 180,000 in July and the unemployment rate dipping one-tenth of a percentage point to 4.8 per cent. Professional and business services, a category that includes architects, engineers and managers, added 70,000 jobs, the most since October.

“This deceleration from last year’s 200,000-plus pace should not be unexpected as the economy has moved closer to full employment”, Federal Reserve Bank of Dallas president Robert Kaplan said in a speech earlier this week, the Wall Street Journal reported. Revisions added a total of 18,000 jobs to overall payrolls in the previous two months. With the June number revised up to 292,000, the average for the last three months now stands at 190,000.

And, year-over-year nominal wage growth rose by 2.6 percent, the same increase we saw last month.

Job growth in 2016 remained “well above the pace needed to maintain a low and stable unemployment rate”, said Jason Furman, chairman of the White House Council of Economic Advisers.

They also revived talk that the Federal Reserve would again raise interest rates by the end of the year. In July, despite its expectations that the job market would continue to strengthen, the Fed chose to leave the U.S. interest rates unchanged for the fifth time this year.

But with June and July’s undoubtedly positive jobs reports, concerns regarding uncertainty about the USA labor market and the impact of Brexit on the us economy have eased up.

Meanwhile, the labor force participation rate, at 62.8%, and the employment-population ratio, at 59.7%, were unchanged in July.

“This was everything you could have asked for, maybe more”, said Michelle Meyer, head of US economics at Bank of America Merrill Lynch. Together, both sectors have added almost a million jobs in the last 12 months, according to the Labor Department.

Analysts widely believe that the expression may indicate that conditions are getting more favorable for further interest rate hikes in the future.

Mining declined by 6,000 jobs last month, while other industries were essentially unchanged, including manufacturing, construction, retail trade, wholesale trade, and information. Health care employment rose by 43,000.

More than 400,000 people joined the labour force in search of work in July, a sign they think more jobs are available.

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But manufacturing continues to struggle and is weighing on hiring.

U.S. jobless claims rise marginally, trend remains favorable