Good news on jobs boosts hopes for US economy

STRONG US jobs growth, falling unemployment and rising wages in July have kept the Federal Reserve on course to raise interest rates again this year. A hiring spree in the leisure and healthcare sectors drove a 209,000 rise in jobs last month, according to the US Labor Department.

This was above the 180,000 increase predicted by economists. The increase helped to push down the US unemployment rate to 4.3pc, matching the 16-year low hit earlier this year. The data also showed hourly wages continued to make steady progress, rising 2.5pc on an annual basis.

Economists said the tightening jobs market and stronger pay growth were likely to ease concern by some policymakers at the US central bank over weakness in inflation.

Policymakers still expect to raise rates once more this year, though markets believe political paralysis, softening growth and weak inflation will delay further increases until 2018. Michael Pearce, an economist at Capital Economics, said: “The jobs data provide reassurance that the real economy remains on a strong growth path.”