US jobs growth slows by more than ex­pected in July

The Malta Business Weekly - - INTERNATIONAL -

The US econ­omy added fewer jobs than ex­pected in July af­ter a surge of hir­ing in the pre­vi­ous months.

Em­ploy­ers added 157,000 jobs in July - 33,000 fewer than ex­pected and well be­low the 248,000 cre­ated in June.

Economists had fore­cast that the num­ber of jobs cre­ated would be close to 190,000 for the month.

The US Depart­ment of La­bor also said the un­em­ploy­ment rate fell from 4.0% to 3.9% in July, near to the 18-year low it reached in May.

Man­u­fac­tur­ers led the job gains in June - a sign that the in­ten­si­fy­ing trade dis­putes be­tween the US and other coun­tries are not yet hurt­ing hir­ing, an­a­lysts said.

The health­care and hos­pi­tal­ity sec­tors also added po­si­tions, but there were marked losses at toy and game re­tail­ers, as chains such as Toys R US shut­tered their doors.

Pre­vi­ous job gain es­ti­mates for May and June were re­vised up­wardly, to 268,000 and 248,000 re­spec­tively.

Those re­vi­sions "take some of the sting out" of the un­ex­pect­edly low rise in July, said Mark Ham­rick, se­nior eco­nomic an­a­lyst at Bankrate.com, which tracks in­ter­est rates.

The job fig­ures fol­low data last week that showed the US econ­omy grew at an an­nu­alised rate of 4.1% in the sec­ond quar­ter of the year.

They ex­tend an un­in­ter­rupted streak of job growth that started in Oc­to­ber 2010 and that has driven down the un­em­ploy­ment rate to lev­els last seen at the turn of the cen­tury.

The tight­en­ing labour mar­ket has also made it harder for em­ploy­ers to fill po­si­tions. There are close to 6.6 mil­lion un­filled jobs across the na­tion.

How­ever wage gains have re­mained rel­a­tively mod­est.

The Depart­ment of La­bor said av­er­age hourly earn­ings in­creased by 0.3% in July to $27.05, mean­ing they were up 2.7% from the same month last year.

The pace of year-on-year growth, how­ever, slowed slightly from the prior months.

"It is clear that wage growth must in­crease," US Sec­re­tary of La­bor Alexan­der Acosta said in a state­ment. "Fur­ther wage in­creases will add a great ben­e­fit to the Amer­i­can work­force."

Ian Shep­herd­son, chief econ­o­mist at Pan­theon Eco­nomics, said the data was "bet­ter than it looks" as the core, three-month trend was of an ad­di­tional 200,000 jobs a month.

He also pre­dicted that the fig­ures would not push the US Fed­eral Re­serve off its course of steady in­ter­est rate in­creases.

"Over­all, these num­bers won't change the Fed's plans; un­less the data over the next few weeks take a sud­den, se­ri­ous turn for the worse, the Fed will hike again next month".

The Fed has al­ready in­creased its base in­ter­est rate twice this year, fol­low­ing meet­ings in March and June, and it now sits at be­tween 1.75%-2%.

Newspapers in English

Newspapers from Malta

© PressReader. All rights reserved.