There weren’t many fireworks in July’s jobs report after June’s blockbuster numbers. U.S. job growth slowed more than economists expected last month, while the unemployment rate ticked up.
The Labor Department reported that non-farm payrolls rose by a less-than-expected 209,000 in July. That marks the sixth straight month that the economy added more than 200,000 jobs and is the first time that has happened since 1997.
Non-farm payrolls were revised higher for the previous two months. The unemployment rate edged up to 6.2% from 6.1% in June as more workers entered the workforce. The labor force participation rate increased to 62.9% in July, after three months stuck at 62.8%.
Gad Levanon, the Director of Macroeconomic and Labor Markets at the Conference Board said the July jobs report was a little disappointing, but not bad news. “The overall picture doesn’t change much; employment is growing rapidly; the baby boomers are retiring in massive numbers... and the downward trend in the unemployment rate is likely to continue,” said Levanon.
Professional and business services accounted for a substantial portion of the employment gains, with 47,000 new positions. However, the job gains were spread across several sectors. Manufacturers added 28,000; retailers, 27,000; construction, 22,000; leisure and hospitality, 21,000, and the government added 11,000 workers.
However, the recent strength in the labor market has not trickled down to workers' paychecks. Average hourly earnings increased only by a penny to $24.45, up 2% from a year earlier. The minimal wage gains cool concerns over inflation said Yahoo Finance Senior Columnist Michael Santoli. This makes it less likely the Federal Reserve will raise interest rates sooner rather than later.
Yahoo’s Finance’s Jeff Macke said the July jobs report is not likely to change the direction of the stock market either, which sold-off sharply on Thursday. “The animal spirits are well and truly in charge of the markets here, regardless of what the [economy] is,” said Macke.
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