The US economy added 255,000 jobs in July, many more than expected, while the unemployment rate was unchanged at 4.9%.
Industries including hospitality and healthcare saw the largest job gains during the month. The return of striking Verizon workers who subtracted from the May jobs report also boosted the gains in July.
And so the July jobs report marks a second straight month of strong job gains and should put away recent concerns about a hiring slowdown in the economy. As we approach the elections, it could give Democratic presidential nominee Hillary Clinton a stronger argument for the status quo.
The number of jobs added in June was revised up by 5,000 to 292,000.
Wages continued to rise for workers in July. Average hourly earnings increased by 0.3%, more than expected, and 2.6% year-on-year, the highest since the Great Recession. Higher wages could hold up the strong level of consumer spending, which drove the economy in recent quarters as business investment fell.
The labour-force participation rate rose to 62.8%. It was being closely watched again to gauge whether a record number of job openings drew people into the labour force.
The rate has steadily declined in recent years, partly because of baby-boomer retirements. But at the same time, there are fewer people outside the labour market finding jobs — suggesting that the economy is near or at full employment.
Virtually no one is expecting the Federal Reserve to raise interest rates at its meeting in September. But after the jobs report, fed fund futures, which reflect traders’ expectations for rates, increased to show a 50-50 chance of a rate hike in January.
Via Bloomberg, here’s what Wall Street was forecasting:
- Nonfarm payrolls: +180,000
- Unemployment rate: 4.8%
- Average hourly earnings month-on-month: +0.2%
- Average hourly earnings year-on-year: +2.6%
- Average weekly hours worked: 34.4