The Labor Department released new hiring and unemployment figures on Friday morning. This is the latest official snapshot of the state of the American economy.þþ• 209,000 jobs were added in July, somewhat above Wall Street economists’ expectations.þþ• The unemployment rate was 4.3 percent. June’s jobless rate was 4.4 percent.þþ• Job gains for May and June were revised upward by 2,000.þþThe Takeawayþþ“This is a Goldilocks report for the markets,” said Michael Gapen, chief United States economist at Barclays, meaning it was neither discouraging nor overheated. Citing the healthy payroll growth and steady gain in average hourly earnings in July, he added, “It really bodes well for macroeconomic growth.”þþIndeed, stocks were higher in early trading after the release of the report, an indication Wall Street could post fresh records Friday. On Wednesday, the Dow Jones industrial average crossed the 22,000 mark for the first time.þþEconomists had been expecting a gain of 180,000 jobs, so the actual data is a sign that the economy is growing faster than other indicators had suggested.þþAnd for years, the missing ingredient in the job report has been robust wage growth, although pay has occasionally jumped on a monthly basis. Now average hourly earnings are up a decent 2.5 percent on a 12-month basis.þþIn July, average hourly earnings rose 0.3 percent. That compares with an increase of 0.2 percent in June.þþWhile faster wage growth is certainly good news for American workers, Wall Street worries that signs of real tightness in the labor market might force the Federal Reserve to tighten monetary policy more quickly. Very low interest rates have kept the financial markets buoyant, so any sign that the central bank’s easy-money policies are coming to an end could take some of the air out of stocks.þþMr. Gapen said the data confirmed that the Fed would most likely stick with the plan Wall Street has been anticipating: a reduction in its bond holdings in September as the central bank gradually reduces its stimulus efforts, followed by a rate increase in December.þþTo be sure, there were pockets of weakness. Retailers have been shedding jobs amid the growth of e-commerce, and in July stores added just 900 workers over all. Still, Mr. Gapen said, the retail weakness “was more than offset last month by gains in professional and business services, leisure and hospitality and health care.”
Source: NY Times
