The U.S. gained 209,000 new jobs and unemployment ticked down a tenth of a percentage point to 4.3 percent in July, the Bureau of Labor Statistics reported Friday, defying economists' expectations for a slight slowdown.
Instead, restaurants, the health care sector, and business support services helped drive robust growth in the month. The jobs recovery is rounding out seven full years of uninterrupted growth, even as the unemployment rate is already at the lowest it has been in 16 years.
"It's a strong number," said Scott Anderson, chief economist for Bank of the West. "Anytime you put up a number over 200,000, you're batting 1,000."
In a tweet, President Trump called the jobs numbers "excellent," saying that he has "only just begun."
Excellent Jobs Numbers just released - and I have only just begun. Many job stifling regulations continue to fall. Movement back to USA!— Donald J. Trump (@realDonaldTrump) August 4, 2017
The resilience of the labor market in recent months has been the strongest indication that the U.S. economy is still growing, and that the risk of a recession is low.
In fact, the perception that the U.S. is near full employment has emboldened the Federal Reserve to continue raising interest rates and reversing monetary stimulus this year, even as inflation has remained subdued and below its target.
Yet Friday's report may force economists at the Fed and elsewhere to reconsider the premise that 4.3 percent unemployment represents the lowest mark possible. They may instead have to weigh the possibility that full employment is still out of reach, and that unemployment could drop significantly further without leading to an overheated economy.
Over the past three months, monthly job gains have averaged 195,000, around twice what is needed to keep up with population growth and maintain a steady unemployment rate.
At the same time, wage gains have not accelerated. Friday's report showed average hourly earnings up 2.5 percent on the year, in line with recent months. If the U.S. were at full employment, faster wage growth and slower job gains would be expected.
Nevertheless, there are plenty of anecdotes suggesting that businesses might soon be forced by low unemployment to offer better pay.
In some parts of the country, and in some sectors, businesses are having trouble finding qualified workers. In Austin, Texas, for example, homebuilders have seen instances of workers walking off the job site to take better offers from rivals desperate for labor, according to local media. Among Maine's coastal tourist businesses, some restaurants are closing for more days of the week because they can't attract enough seasonal workers.
"I do think we're at that inflection point where you're going to start to see better wage numbers," said Anderson.
The biggest question about the jobs market in 2017, though, is just how many people might want jobs who aren't captured in the official unemployment rate.
It's a question that is difficult to answer because it's hard to distinguish between people who quit the job hunt during the recession out of discouragement and those who would have exited the labor force anyway thanks to the ongoing demographic changes facing the U.S., such as the retirement of the Baby Boom generation.
Although that demographic change is expected to lower workforce participation in the years ahead, the labor force participation rate has remained roughly steady at just below 63 percent for the past two years, after plummeting in the wake of the financial crisis. In July, the workforce grew by 350,000, lifting the participation rate up a tenth of a percentage point to 62.9 percent. That buoyancy likely reflects the fact that low unemployment and abundant job openings have enticed some people not to quit the labor force, or even to rejoin the job hunt after years of being sidelined.
Some data suggest that there might be many such people willing to take jobs if they become available. As an illustration, the last time the unemployment rate was 4.3 percent, in May of 2001, 80.8 percent of all people between the ages of 25 and 54 were employed. In July, with the unemployment rate at the same level, the corresponding employment rate for prime working-age Americans was 78.7. That difference suggests there still may be upward of 2 million working-age people who could be enticed off the sidelines.