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 Nonfarm payrolls increased 215,000 last month as a pickup in
construction and manufacturing jobs offset further declines in the
mining sector, the Labor Department said on Friday. The unemployment
rate held at a seven-year low of 5.3 percent.
Payrolls data for May and June were revised to show 14,000 more jobs
created than previously reported. In addition, the average workweek
increased to 34.6 hours, the most since February, from 34.5 hours in
June.
"We view this report as easily clearing the hurdle needed to keep
the Fed on track for a September rate hike. The bar for not moving
now is much higher," said Rob Martin, an economist at Barclays in
New York.
The Fed last month upgraded its assessment of the labor market,
describing it as continuing to "improve, with solid job gains and
declining unemployment."
The U.S. central bank said its policy-setting committee anticipated
it would be appropriate to raise lending rates when it has seen
"some further improvement" in the jobs market. It has not raised
rates since 2006.
U.S. stocks fell after the jobs data as traders saw a greater chance
of a rate hike next month. The dollar rose to near a four-month high
against a basket of currencies before weakening. Prices for
longer-dated U.S. Treasuries were up.
Though hiring has slowed from last year's robust pace - mostly
because of job losses in the energy sector - it remains at double
the rate needed to keep up with population growth.
Average hourly earnings increased five cents, or 0.2 percent, last
month after being flat in June. That put them 2.1 percent above the
year-ago level, but well shy of the 3.5 percent growth rate
economists associate with full employment.
Still, the gain supported views that a sharp slowdown in
compensation growth in the second quarter and consumer spending in
June were temporary. The aggregate weekly payrolls index, a proxy
for take-home wages, rose 0.6 percent in July and was up 4.9 percent
from a year ago.
Economists had forecast nonfarm payrolls increasing 223,000 last
month and wages rising 0.2 percent.
WAGE VIGIL
Wage growth has been disappointingly slow. But tightening labor
market conditions and decisions by several state and local
governments to raise their minimum wage have fueled expectations of
a pickup.
In addition, a number of retailers, including Walmart, the nation's
largest private employer, Target and TJX Cos have increased pay for
hourly workers.
The jobless rate is near the 5.0 percent to 5.2 percent range most
Fed officials think is consistent with a steady but low level of
inflation.
A broad measure of joblessness that includes people who want to work
but have given up searching and those working part-time because they
cannot find full-time employment fell one-tenth of a percentage
point to a seven-year low of 10.4 percent in July.
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The short-term unemployment rate slipped to 3.8 percent from 3.9
percent in June, while the jobless rate for the long-term unemployed
held steady at 1.4 percent.
But the labor force participation rate, or the share of working-age
Americans who are employed or at least looking for a job, held at a
more than 37-1/2-year low of 62.6 percent.
The fairly healthy employment report added to robust July automobile
sales and service industries data in suggesting the economy
continues to gather momentum after growing at a 2.3 percent annual
rate in the second quarter.
Last month's increase in the workweek together with the solid
payrolls gain lifted the index of total hours worked by 0.5 percent,
the largest rise since October. The hours worked index is seen as a
proxy for gross domestic product.
"We think this represents another solid employment report that meets
the criteria for 'some further improvement' in the labor market and
keeps the Fed in play for September," said Michelle Girard, chief
economist at RBS in Stamford, Connecticut.
Employment gains in July were broad-based, with the share of
industries adding jobs hitting a seven-month high. Construction
payrolls rose 6,000 thanks to a strengthening housing market, after
being unchanged in June.
Factory payrolls increased 15,000 after rising 2,000 in June. The
retail sector added 35,900 jobs.
Professional and business services payrolls gained 40,000 after
increasing 69,000 in June. The slowdown reflected a drop of 8,900 in
temporary employment, which was the weakest reading since September
2012.
More layoffs in the energy sector, which is grappling with last
year's sharp decline in crude oil prices, were a drag on mining
payrolls, which shed 4,000 jobs in July. The mining sector has lost
78,000 jobs since December.
Oilfield giants Schlumberger and Halliburton and many others in the
oil and gas industry have announced thousands of job cuts in the
past few months.
(Reporting by Lucia Mutikani; Editing by Clive McKeef and Paul
Simao)
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