The economy added a solid 215,000 jobs last month in a development that could help give the Federal Reserve the evidence it needs to raise interest rates in September for the first time in nearly a decade. The unemployment rate, which is calculated from a different survey, was unchanged at 5.3%, the Labor Department said Friday, as a modest rise in employment was offset by an increase in the labor force as some Americans on the sidelines resumed their job searches.Image may be NSFW.
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Economists surveyed by Bloomberg expected payroll gains of 225,000, according to their median forecast. Businesses added 210,000 jobs on strong advances by retail, health care, professional services and leisure and hospitality. Federal, state and local governments added 5,000. Job gains for May and June were revised up by a total 14,000.
Wage growth ticked up slightly as average hourly earnings rose 5 cents to $24.99 after dipping in June. Over the past year, average wages are up 2.1%, roughly in line with the sluggish 2% pace that has prevailed during the six-year-old recovery. The Fed is seeking signs of faster wage growth as it considers increasing its benchmark interest rate. More encouraging is that the number of part-time workers who prefer full-time job fell by 200,000 to 6.3 million. That measure is an indicator of slack, or excess capacity, in the labor market that the Fed is closely watching; a drop adds to the case for raising rates. Partly as a result of the decline, the broader underemployment rate — which includes those workers, the unemployed and discouraged Americans who have stopped looking for jobs — fell to 10.4% from 10.5%.
Also, the average workweek edged up to 34.6 hours from 34.5 hours in a possible sign of continued strong job growth in the months ahead. Employers typically increase the hours of existing workers before adding new ones. The Fed last month said it will raise its benchmark interest rate when it grows confident that weak inflation will pick up and it sees “some” further improvement in the labor market. Suggesting that the new qualifier means the central bank needs to see only modest additional gains, some economists considered it a signal of a likely rate hike in September.
