Economy

US employers add 157000 jobs; jobless rate falls to 3.9%

US employers add 157000 jobs; jobless rate falls to 3.9%

"There's no evidence that businesses are changing the way that they're hiring and spending". Typically, businesses raise wages when it's hard to find the talent they want, but annual wage growth remained at a tepid 2.7 percent, the Labor Department said.

The Federal Reserve left interest rates unchanged on Wednesday while painting an upbeat portrait of both the labor market and economy.

Diane Swonk, chief economist at Grant Thornton, said that amid disappointing growth in wages, President Donald Trump's trade wars threatened to eat even further into workers' pay by pushing up inflation.

Average hourly earnings rose 0.3 percent from the previous month, also matching the median estimate of economists, though that was up from 0.1 percent in June. But many potential workers are still on the sidelines, and Congress has an opening to help.

The marginal miss on employment numbers is accommodated by the numbers for May and June being revised higher, from 244,000 to 268,000 in May and from 213,000 to 248,000 in June. "For the second consecutive month, the unemployment rate for Hispanics reached a record low", the statement added. With revisions, job gains have averaged 224,000 a month.

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The latest job figures follow a steady stream of hiring gains and a robust reading on economic growth.

While business associations celebrated the job reports, they also noted that employment problems remain in the U.S. In the service sector, hiring of 118,000 was the lowest since December, partly reflecting the cuts at Toys "R" Us. 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. Construction gained 19,000 jobs, but retail trade only 7,000.

The decline in the jobless rate reflected a 284,000 decline in the number of unemployed people in the workforce, while the number of employed increased by 389,000. That's just two-tenths of a percentage point from the lowest in 50 years. As economic momentum continues, the labor force is still growing and unemployment is receding, resulting in a tick down in the unemployment rate and a rise in the employment-to-population ratio.

The unemployment rate for workers without a high school degree fell to 5.1 percent in July, the lowest rate since the Bureau of Labor Statistics adjusted its education measures in 1992.

Peter Cramer of Prime Advisors says one reason wages are not growing faster is the large but shrinking pool of part-time workers who are getting longer hours or full-time work.