Jobs report misses as unemployment rate slides near 18-year low

Gladys Abbott
August 5, 2018

Although labor shortage is a constant concern in the construction sector, it added 19,000 jobs in July, lifting its 2018 total so far to 170,000 (2017 total: 250,000).

Excluding those factors, hiring in July would have been closer to the monthly average this year. Retail payrolls rebounded by 7,100 jobs last month after losing 20,200 in June.

This year's pickup comes after a steady economic recovery that has entered its tenth year and is now the second-longest on record.

"Today's #JobsReport shows the continued strength of our economy".

Since the beginning of this year, the US has seen multiple economic milestones in addition to 1.5 million new jobs. Economists' maintain that wages will rise as economy drains remaining slack from the labor market and businesses' pay more to retain workers.

"The important point is that there is no sign of overheating but that aggregate wages and salaries (jobs x hours x earnings) are growing at a brisk pace", Neil Dutta, the head of United States economics at Renaissance Macro, said in a note. The year-over-year gain is unchanged at 2.7 percent.

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"The vast majority of the jobs we're adding are in services, which tend to be low-wage sectors", said Megan Greene, chief economist at Manulife Asset Management. Other sectors are seeing wages stagnate or even fall.

The overall unemployment rate inched down to 3.9 percent from 4 percent the month before, the Bureau of Labor Statistics (BLS) reported.

The unemployment rate nosed down 0.1 percentage points from June, to 3.9 percent, the BLS said in its latest report issued August 3. While the unemployment rate for workers with less than a high school degree is well below the prerecession level and even its 2000 low, the unemployment rate for workers with a college degree, at 2.2 percent, is still above its prerecession low of 1.8 percent and well above its 2000 low of 1.5 percent. Over the past year, manufacturers have hired 327,000 people, the most since the 12 months through April 1995.

The Trump administration cheered the jobs numbers on Friday as a sign its economic policies are continuing to boost growth and hiring.

"House price appreciation has exceeded wage growth for six years, so any signal that wage growth may be closing the gap is good news", said Fleming.

Stocks rose moderately after the report was released.

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