July Jobs Report: Payrolls Rise 157,000 and Unemployment Rate Drops to 3.9%

July Jobs Report: Payrolls Rise 157,000 and Unemployment Rate Drops to 3.9%

Average hourly wages for all employees on private nonfarm payrolls rose in July by $0.07 to $27.05; average hourly earnings climbed 2.7 percent relative to July 2017, and economists expect labour costs to keep rising. "'Help Wanted' is still the most prevalent signage you'll see in an industrial park". Below that was outpatient care centers, adding 4,300 jobs.

There have also been concerns that the trade tensions could dampen business confidence and lead companies to shelve spending and hiring plans.

On the bright side, the hiring spree has continued as the economy marches along.

The BLS figures contrast with those of payroll services firm ADP Inc., whose employment report issued August 1 stated that USA private sector employment increased by 219,000 jobs in July. Wages have remained in a holding pattern below the highs of the last expansion, despite persistent complaints from employers that they're struggling to find skilled workers and job openings near a record high.

"The important point is that there is no sign of overheating but that aggregate wages and salaries (jobs x hours x earnings) are growing at a brisk pace", Neil Dutta, the head of USA economics at Renaissance Macro, said in a note.

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Although the labor force participation rate was unchanged at 62.9%, it increased for the prime working-age cohort (25-54 years).

The retail sector also added 7,000 jobs, despite 32,000 jobs lost in sporting goods, hobby, book, music and toy stores. She said that even though hiring has picked up in manufacturing, it's still dwarfed by hiring in lower-wage industries.

The broadest measure of unemployment - including all workers forced into part-time jobs and those who have become discouraged in their search - fell three tenths to 7.5 percent, its lowest level since May 2001. In May, the unemployment rate hit an 18-year low of 3.8%. The low unemployment rate could allow the Federal Reserve to raise interest rates again in September. Over the past year, manufacturers have hired 327,000 people, the most since the 12 months through April 1995.

That was just one aspect of the good news laid out in the July jobs report.

If the pace of hiring continues at the same rate it has since January, the United States is likely to add about 2.6 million jobs this year, which would be the strongest since 2015.

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