HUGE BEAT ON THE JOBS REPORT
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The US economy added 255,000 jobs in July, many more than expected, while the unemployment rate was unchanged at 4.9%.
Industries including hospitality and health care saw the largest job gains during the month. The return of striking Verizon workers — who subtracted from the May jobs report — boosted the gains in July.
After two huge swings — down in May, then up in June — economists had expected the July jobs report to show that the pace of job creation moved back towards trend.
The number of jobs added in June was revised up by 5,000 to 292,000.
Wages continued to rise for workers. Average hourly earnings rose 0.3%, and 2.6% year-on-year, the highest since the Great Recession.
The labor force participation rate rose to 62.8%. It was being closely watched again to gauge whether or not a record number of job openings is drawing people into the labor force. The rate has steadily declined in recent years, partly because of baby-boomer retirements.
But at the same time, there are fewer people outside the labor market finding jobs — suggesting that the economy is near or at full employment.
Virtually no one is expecting the Federal Reserve to raise interest rates at its September meeting. But after the jobs report, fed fund futures, which reflect traders' expectations for rates, increased and showed a 50/50 chance of a rate hike in January.
Via Bloomberg, here's what Wall Street was forecasting:
- Nonfarm payrolls: +180,000
- Unemployment rate: 4.8%
- Average hourly earnings month-on-month: +0.2%
- Average hourly earnings year-on-year: +2.6%
- Average weekly hours worked: 34.4