After two months of dependable US jobs growth, the labor department reported a touch of lethargy in the sector on Friday, with nonfarm payroll jobs increasing to 157,000 in July – below the 190,000 anticipated in a survey of Reuters economists.
The gain was the lowest since March, though it still dropped the unemployment rate to 3.9% from 4%, or roughly the lowest in half a century.
Unemployment as a measure that includes discouraged workers and those holding jobs part-time for economic reasons, also declined to 7.9% from 8.1%.
The marginal miss on employment numbers is accommodated by the numbers for May and June being revised higher, from 244,000 to 268,000 in May and from 213,000 to 248,000 in June.
The relative consistency in jobs growth allows economist to turn their attention to wage growth, a key reading for policy makers looking to keep inflation to the Federal Reserve’s 2% target.
Average hourly earnings came in at 2.7% higher than over the same period last year, at $27.05. Last week, the commerce department reported that GDP had grown at an annual rate of 4.1% in the second quarter, the fastest pace in nearly four years.
Responding to the latest job numbers, Paul Ashworth, chief US economist at Capital Economics, noted: “The labor market still appears to be in good health. This won’t derail the Fed’s plans to hike interest rates again next month.”