July jobs report: 4 things to know

  • 06/08/2017
July jobs report: 4 things to know
The stock market average was up by 36 points on Friday, as the USA economy added even more jobs than previously expected.

"Excellent Jobs Numbers just released - and I have only just begun", Donald Trump tweeted.

The unemployment rate edged lower to 4.3%, matching May's figure which was the lowest since 2001.

The number of nonfarm jobs in the United States increased by 209,000 in July, according to the Bureau of Labour Statistics - beating economists' expectations of a 183,000 rise.

But wage growth is sluggish. The Dow has reached a new high, on average, once every seven days since recovering from the Great Recession in March 2013.

"The mystery continues to be with the labour market this tight, and the level of improvement we continue to see, that wages stubbornly stay at 2% year-over-year wage growth".

For now, wage growth is steady enough that it should keep plans on track for the Federal Reserve to take action to raise interest rates, said Luke Bartholomew, a strategist at Aberdeen Asset Management. Payrolls have expanded by 0.7% since January, less than half as much as during Richard Nixon's first term but far more than during Barack Obama's first six months, which is surely a point of pride for the current president.

July's job gains came across the board. Health care gained 39,000 new positions. Remember an important caveat: Presidents aren't entirely responsible for the job market's gains or losses. Business services and mining were also among the gainers. "Many job stifling regulations continue to fall". Wages, however, have not risen by as much as most economists would expect if the economy were operating at full employment.

"There's still lots of people coming back into the labor force, looking for jobs", said Steve Rick, chief economist at CUNA Mutual, an insurance firm.

The US president also hailed the announcement by auto companies Toyota and Mazda that they were planning to build a new vehicle plant in the US. Last year, there were 27 million foreign-born workers in the United States.
  
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