Washington (AFP) – The US economy generated more than a quarter of a million jobs in July — a bigger-than-expected gain that will likely provide valuable ammunition for Democrat Hillary Clinton as she and Donald Trump battle for the White House.
The new numbers released Friday were also accompanied by upward revisions for the months of May and June in a sign that the job market in the world’s largest economy is healthier than previously thought.
Non-farm payrolls rose by 255,000 positions in July while the unemployment rate remained stable at 4.9 percent, the Labor Department reported. Forecasts had called for a much more modest increase of 185,000 jobs.
Private businesses and government employers added 292,000 jobs in June, not the 287,000 first reported, and 24,000 jobs in May, not the very low, downward-revised figure of 11,000.
“This month’s report confirms that the Great Recession is indeed in the nation’s rearview mirror — the economy has added jobs for 70 consecutive months, the longest streak on record,” Labor Secretary Thomas Perez said.
On the White House campaign trail, Clinton has painted a picture of optimism and jobs growth, while Trump has cast America as an economy in decline — Friday’s numbers can only help Clinton.
The Trump campaign sought to downplay the news, with senior policy advisor Stephen Miller saying the recovery was the weakest since the Great Depression, with conditions largely disfavoring working people.
“Entire communities have been wiped out by off-shoring,” said Miller.
“Many workers today are earning less than they did in 1970, and household incomes are down nearly $2,000 under the Obama administration.”
– Fed rate hike? –
The closely watched figures help fill out a complex economic picture for market observers eager for signs of whether the US Federal Reserve will raise interest rates later this year.
Monetary policy makers earlier this year veered off a course of planned, successive rate hikes as some signs emerged that the American economy might not be on sure footing.
The Commerce Department said last month that economic activity had grown by a paltry 1.2 percent in the second quarter.
But that data was at odds with Friday’s rosier jobs report.
“Employment rose in all sectors of the economy, helping to keep the rate of unemployment at 4.9 percent amid an increase in the number of people entering the labor market looking for work,” said Chris Williamson of IHS Markit.
“Adding to the good news was an improvement in pay growth. Average hourly earnings rose 0.3 percent against expectations of a mere 0.2 percent rise,” said Williamson, noting that pay growth was still below pre-crisis rates.
Gains were strongest in professional and business services, with 70,000 new jobs added, and in health care, where 43,000 new jobs added. Together, both sectors have added nearly a million jobs in the last 12 months, according to the Labor Department.
Employment in mining continued to fall, losing 6,000 positions from the prior month and putting the industry down 220,000 jobs since a peak hit in September 2014.
The average workweek rose 0.1 hours to 34.5 hours while average hourly earnings inched upwards by 8 cents to $25.69, up 2.6 percent since the start of the year.
– Stocks up –
Equities markets reacted favorably to the news in early trading, with the Dow Jones Industrial Average up 0.8 percent at 18,498.02 and the tech-heavy Nasdaq up 0.92 percent at 5,214.03.
The broader S&P 500 was up 0.68 percent at a record intraday high of 2,178.89.
“We believe the trend remains more than strong enough to keep the unemployment rate declining over time,” said Jim O’Sullivan of High Frequency Economics.
“Today’s report helps the case for more Fed tightening before too long — if strength is sustained — although officials are being ultra cautious/dovish as they worry about downside risks,” he added.
COMMENTS
Please let us know if you're having issues with commenting.