The Bureau of Labor Statistics reported this morning that the economy added 157,000 jobs in July, while the unemployment rate inched lower, going from to 4% to 3.9%. US establishments added a net new 157,000 jobs, following the upwardly revised average gains in May and June of an outsized 258,000.
"The basic story of the labor market has been a slow and steady recovery of month after month of impressive jobs gains", said Michael Strain, director of economic policy studies at the right-leaning American Enterprise Institute. If the jobless rate drops to 3.7 percent or below, it would be the lowest unemployment rate since 1969. The Federal Reserve is closely watching the wages component as it seeks to meet its 2 percent inflation target. Despite many company executives complaining that they can not find workers to fill open positions, wage growth remains sluggish. The number of unemployed persons declined by 284,000 to 6.3 million in July.
The economy grew in the April-June quarter at its fastest pace in four years. "This is an issue not just for the US, but in every other developed market".
■ Average hourly earnings rose by 7 cents to $27.05. Retail was also sluggish, with 7,000 job gains. Business and consumers are optimistic, suggesting solid hiring is likely to continue.
The U.S. unemployment rate dropped slightly in July, while job gains were lower than many analysts predicted. "@POTUS is keeping his promise to restore our economy and put Americans back to work", said Commerce Secretary Wilbur Ross in an August 3 tweet. Wage growth has been stuck around that level for two years.
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The unemployment rate ticked down to 3.9 percent from 4 percent. Mining, wholesale trade, transportation and warehousing, information and financial activities remained mostly flat, the BLS said.
Wall Street finished higher despite the disappointing jobs report, which coincided with a surprising leap in the trade deficit. Faucher writes that as that happens, job growth will slow down because businesses will find it more hard to recruit new hires.
Hiring in the goods-producing sector rose by 52,000, in line with its strong recent trend, while job growth in the service-providing sector moderated to 118,000 from outsized 182,000 and 204,000 gains in June and May, respectively.
Government employment fell by 13,000 jobs in July.