The US economy saw robust job creation in July, largely surpassing analyst expectations, while the unemployment rate remained stable at 4.9%, the Labor Department reported yesterday.
The new numbers were also accompanied by upward revisions for the months of May and June in a sign that the job market in the world’s largest economy is healthier than previously thought.
The strong figures also come in the middle of the heated US presidential campaign, and run contrary to Republican nominee Donald Trump’s dire portrait of an economy in ruins.
Non-farm payrolls rose by 255,000 positions in July – far exceeding analyst forecasts for a far more modest increase of 185,000 jobs.
Private businesses and government employers added 292,000 jobs in June, not the 287,000 first reported, and 24,000 jobs in May, not the very low, downward-revised figure of 11,000.
“This month’s report confirms that the Great Recession is indeed in the nation’s rearview mirror – the economy has added jobs for 70 consecutive months, the longest streak on record,” Labor Secretary Thomas Perez said.
The closely watched figures help fill out a complex economic picture for market observers eager for signs of whether the US Federal Reserve will raise interest rates later this year.
Monetary policy makers earlier this year veered off a course of planned, successive rate hikes as signs grew that the American economy might not be on sure footing.
The Commerce Department said last month that economic activity had grown by a paltry 1.2% in the second quarter – data at odds with yesterday’s rosier jobs report.
“Employment rose in all sectors of the economy, helping to keep the rate of unemployment at 4.9% amid an increase in the number of people entering the labour market looking for work,” said Chris Williamson of IHS Markit.
“Adding to the good news was an improvement in pay growth. Average hourly earnings rose 0.3% against expectations of a mere 0.2% rise,” said Williamson, noting that pay growth was still below pre-crisis rates. Gains were strongest in professional and business services, with 70,000 new jobs added, and in health care, where 43,000 new jobs added.
Together, both sectors have added nearly a million jobs in the last 12 months, according to the Labour Department.
Employment in mining continued to fall, losing 6,000 positions from the prior month and putting the industry down 220,000 jobs since a peak hit in September 2014.
The average workweek rose 0.1 hours to 34.5 hours while average hourly earnings inched upwards by 8 cents to $25.69, up 2.6% since the start of the year.
“We believe the trend remains more than strong enough to keep the unemployment rate declining over time,” said Jim O’Sullivan of High Frequency Economics.
“Today’s report helps the case for more Fed tightening before too long – if strength is sustained – although officials are being ultra cautious/dovish as they worry about downside risks,” he added.