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Unemployment Rate Falls to 3.9 Percent

05 August, 2018, 22:42 | Author: Sara Gill
  • US jobs growth slows more than expected in July

Overall, U.S. employers added 157,000 jobs in July.

After two months of dependable USA jobs growth, the labor department reported a touch of lethargy in the sector on Friday, with nonfarm payroll jobs increasing to 157,000 in July - below the 190,000 anticipated in a survey of Reuters economists.

The economy expanded at a 4.1 per cent annual rate in the April-June quarter, the strongest showing in almost four years.

The jobless rate had risen in June from an 18-year low of 3.8 percent in May. In June, there was a surge in the number of people re-entering the labor force, while the number of those who gave up on their job searches fell.

Jobs and recruiting site Glassdoor tracks wages across the US in its Local Pay Reports.

The slowdown in hiring last month likely is not the result of trade tensions, which have escalated in recent days, but rather because of a shortage of workers. Typically, when unemployment has fallen below 4 per cent in the past, wages have increased at a faster pace.


One area of concern in the jobs data released this week is a marked downturn in wages.

Another highlight from Friday's report was a decline in the underemployment rate - a measure that captures both those out of work and people who want full-time work but are working part-time - which dropped to a post-crisis low of 7.5% in July, down from 7.8% in June. Manufacturing added 37,000 jobs in July, with most of the gain in factories producing durable goods.

Mocuta added that the dip in the unemployment rate without any corresponding upward pressure on wages suggested more slack in the labor market than the unemployment rate might otherwise suggest.

Excluding those factors, hiring in July would have been closer to the monthly average this year. Consumer prices rose 2.9 percent in June from a year earlier, more than the average wage gain.

Professional/business services gained 51,000 jobs, with temporary help services adding 28,000 jobs and computer systems design 8,000 jobs, according to the BLS.

Yet the trade fights didn't appear to impact hiring last month. Employment rose in transportation equipment (+13,000), machinery (+6,000), and electronic instruments (+2,000). Small businesses (one to 49 employees) grew by 52,000 jobs, while large businesses (500 employees or more) gained 48,000 jobs. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy.

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