U.S. labor market stayed on track in July
- Employers added 164,000 jobs last month, on track with economists' estimates.
- The unemployment rate was unchanged at 3.7%.
- Wages, which rose 3.2%, are still growing more slowly than expected given that the jobless rate is hovering around a 50-year low.
Hiring around the U.S. slowed in July, with businesses moderating their pace of job growth from bumper employment figures the previous month. The modest slowdown reinforces the decision on Wednesday by the Federal Reserve to cut interest rates to stimulate the economy.
Economists had forecast employers would add about 165,000 new jobs in July. The nation's unemployment rate was unchanged at 3.7%, compared with forecasts for 3.6%.
"The payrolls data remain consistent with the overall economy still growing fairly solidly, despite the drag from trade tensions and trade-related weakness generally," Jim O'Sullivan, chief U.S. economist with High Frequency Economics, said in a research note. "That said, there has been some slowing, and yesterday's tariff announcement suggests more trade-related weakening in the months ahead."
The Federal Reserve this week lowered its benchmark interest rate for the first time since 2008, although Fed Chairman Jerome Powell said the central bank viewed it as "more of a mid-cycle adjustment than the start of a rate cutting cycle." He also emphasized that the U.S. economy remains relatively strong but global growth is weakening faster than expected amid rising trade tensions.
President Donald Trump on Thursday threatened to escalate the U.S. trade war with China by imposing a 10% tariff on $300 billion in Chinese imports starting Sept. 1. Economists and a range of industries say the dispute is hurting economic growth and raising prices for consumers.
Solid, not spectacular
While employers are hiring, growth cooled in July, partially due to a slowdown in manufacturing hiring and a decline in mining jobs. Even so, average hourly wages over the last 12 months have risen 3.2%, up from 3.1% the previous month. Worker pay is still growing more slowly than expected given that the jobless rate is hovering around a 50-year low, according to economists.
"This jobs report was fine but not spectacular," said Indeed Hiring Lab director of economic research Martha Gimbel in an email. "Job growth continued to slow, and is now less than three-quarters of what it was on average at this point last year."
She added, "Frustratingly, although wage growth ticked up this month, it remains below the rates seen earlier this year."
Who's hiring
Hiring by professional and technical services companies and in health care helped lift the jobs numbers in July, according to data from the Bureau of Labor Statistics. Professional and technical services companies, such as tech businesses, created 31,000 new jobs last month.
Health care businesses hired at nearly the same pace as the previous month, adding 30,000 new jobs in July. Manufacturers, mired in a slump in recent months, added 16,000 jobs. Mining jobs, an area that is a focus for President Donald Trump, declined by 5,000 last month.
