The US’ latest jobs report shows that the country’s labour market is once again picking up steam. According to the report by the Department of Labor, non-farm payroll employment grew by 255,000 in July, beating expectations.
While June had seen 292,000 jobs added to the US economy, the prior month of May had seen particularly dismal results, with only 24,000 jobs added. The latest figures suggest that May’s disappointing results were a blip.
The strong expansion in employment also eases fears over a potential slowdown in the US economy and increased likelihood of rate hike by the Federal Reserve later in the year.
The strong expansion in employment also eases fears over a potential slowdown in the US economy
The report noted that the much of the jobs gains came in professional and business services, as well as the healthcare and financial sectors. Employment in the country’s energy sectors – including oil, gas and coal – continued to decline, as low prices continued to squeeze the sector. Manufacturing saw a modest expansion, contributing 9,000 new jobs.
The report also showed relatively strong gains for wage growth. Average hourly earnings for all private sector employees increased by eight cents in July, to $25.69, and by seven cents for private sector production and nonsupervisory workers in the same period, to $21.59. Over the past year, nominal hourly earnings for private sector workers increased by 2.6 percent, outpacing the one percent consumer price rate.
Labour force participation also strengthened slightly, by a tenth of a percentage, to 62.8 percent. Demographic pressures will continue to push down upon the labour force participation rate as more baby boomers reach retirement age, but the slight increase suggests that those in prime working age are now gradually re-joining the workforce.
For more on US labour force participation rates, look out for the special report on the topic in the next issue of World Finance.