USA jobless rate drops to 3.9%. in July; 157000 new jobs created

Roman Schwartz
August 5, 2018

The unemployment rate ticked down for both groups last month.

"We got enough upward revisions to offset the slight disappointment on the July number", said Simona Mocuta, senior economist with State Street Global Advisors.

Employers added 157,000 net new positions last month, with slower gains in auto manufacturing, transportation and mining, while the jobless rate fell a tenth to 3.9 percent, according to the closely-watched monthly Labor Department report. Americans with fewer skills are also benefiting from hiring managers' desperation: The unemployment rate for those without a high-school degree fell to a record low in July. The BLS also provides a rate that counts in people who looked for work in the past 12 months as well as people who work part-time but want a full-time job. "This is an issue not just for the US, but in every other developed market".

Wages meanwhile rose 0.3 percent for the month to an average of $27.05 an hour, putting them up 2.7 percent higher than July of previous year - still below 2.8 percent annual inflation rate.

Average hourly earnings increased seven cents, or 0.3 per cent, in July after gaining 0.1 per cent in June.

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The latest job figures follow a steady stream of hiring gains and a robust reading on economic growth. The annual increase in wages was unchanged at 2.7 per cent in July. The economy created 59,000 more jobs in May and June than previously reported and needs to generate about 120,000 jobs per month to keep up with growth in the working-age population.

Yet the trade fights didn't appear to impact hiring last month. In comparison, nondepositories employed 339,600 people 12 months earlier and had a downwardly revised 341,200 workers on their payrolls in May of this year.

The labor market has accelerated as the economy expands. As usual, ambulatory healthcare services dominated healthcare hiring with its 9,900 new jobs, although that was a 27% drop from the 13,500 jobs added in June.

Although labor shortage is a constant concern in the construction sector, it added 19,000 jobs in July, lifting its 2018 total so far to 170,000 (2017 total: 250,000).

Among the unemployed, the number of people looking for work after losing or quitting their jobs fell by almost 290,000 to 1.8 million. The US central bank said, "the labour market has continued to strengthen and economic activity has been rising at a strong rate". But many potential workers are still on the sidelines, and Congress has an opening to help.

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