The economy gained 157,000 new jobs in July, the Bureau of Labor Statistics reported Friday morning, and the unemployment rate ticked down to 3.9 percent.
Job growth was lower than the roughly 190,000 new jobs that forecasters expected, though economists said it still remains a strong market for those seeking employment
The labor force participation rate stood steady from the prior month at just under 63 percent in July. Business support companies, manufacturers and the health care sector all saw employment increase.
“Over the past couple of months what we’re seeing is a response to a very attractive labor market for job seekers,” Cathy Barrera, ZipRecruiter’s chief economist, said in an interview. “Like last month, it seems that we are seeing people come off of the sidelines.”
Friday’s report revised up the job growth numbers for May and June. Including July’s numbers, job creation over the past three month has averaged 224,000 per month, about twice as high as needed to keep unemployment trending down. And layoffs have been extremely rare in recent weeks, a good sign for future employment growth.
But despite the strong job market, average hourly wage increases for private payrolls stayed steady at 2.7 percent, a troubling sign for some experts.
“Wages aren’t moving up,” Robert Frick, a corporate economist with Navy Federal Credit Union, told the Washington Examiner. “If people aren’t getting real wage increases, sooner or later that’s going to affect consumer spending.”
The manufacturing industry continues to post strong employment gains, which its top trade association attributed to the GOP-led tax law. The National Association of Manufacturers, however, warned that the number of unfilled jobs could increase dramatically over the next several years.
“While this increased employment is undoubtedly good news, job growth exacerbates the monumental manufacturing workforce shortage,” Carolyn Lee, executive director of NAM’s non-profit Manufacturing Institute, said in a statement. “Congress and the administration have taken important steps in recent weeks to tackle this challenge, but this jobs report is a reminder that more work needs to be done through partnerships with the private sector to solve the workforce crisis facing manufacturing in the United States.”
Federal Reserve officials will view the labor market’s recent performance as corroboration of their judgment that the economy is strong enough to justify higher interest rates. The continued job creation will also convince the Trump administration that it is right to set the goal of creating jobs not just for the dwindling number of unemployed workers, but also for people who currently aren’t looking for jobs.
Still, any weakening in job growth could stoke fears that the threat of a trade war — the biggest threat currently facing the economy — is causing U.S. businesses to put off hiring new employees. Some small businesses have already laid off workers due to the Trump administration’s new tariffs on steel and aluminum imports, while larger companies have warned of price increases to offset the additional costs.
