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Aug 2, 2019

Unemployment News | U.S. adds 164,000 new jobs in July to keep unemployment near 50-year low of 3.7%

Jeffry Bartash



Bloomberg News/Landov
The U.S. economy created 164,000 new jobs in July, keeping the unemployment rate near a 50-year low.
The numbers: The economy created a steady 164,000 new jobs in July, underscoring the strength of a robust U.S. labor market that’s show little sign of deterioration even as the economy faces stiffer challenges than it did a year ago.
The increase in new jobs last month was slightly below the 171,000 forecast of economists polled by MarketWatch.
The unemployment rate was unchanged at 3.7% and remained near a 50-year low. In a good sign, more people entered the labor force in search of work.
The lowest unemployment rate since the late 1960s, however, is not generating the kind of wage increases workers used to receive when the labor market was so tight. Wage gains appeared to have topped out at just slightly above 3% a year.
Before the July employment report, premarket trading pointed to a lower opening for the stock market. Stocks fell on Thursday after President Trump threatened to apply more tariffs to Chinese goods in September amid a stalemate in talks over trade rules.
Read: Worker pay and benefits grow more slowly in another sign of ebbing inflation
What happened: Professional and business services once again led the way in hiring, adding 31,000 jobs. Health-care companies hired 30,000 workers and providers of social assistance increased employment by 20,000.
Manufacturers created 16,000 jobs, but hiring has slowly sharply over the past year and firms have cut back on worker hours. The manufacturing workweek in July was the shortest since 2011.
Employment fell for sixth month in a row among retailers and media and information services also shed jobs
The amount of money the average worker earns rose 8 cents to $27.98 an hour in July. The increase in pay in the past 12 months edged up to 3.2% from 3.1%, but it’s still below a postrecession peak of 3.4%.
In the past wages typically rose as much as 4% a year when unemployment was extremely low.
Employment gains for June and May, meanwhile, were revised down by a combined 41,000.
Read: Jobless claims climb 8,000 to 215,000 at end of July, but layoffs still extremely low
Big picture: The economy has more problems now than it did a year ago, but the labor market is not one of them.
The economy has created an average of 165,000 new jobs a month in 2019. Although hiring has slowed since last year, the U.S. only needs to add about 80,000 jobs a month to soak up all the new people entering the labor force and nudge the unemployment rate even lower, economists estimate.
The robust labor market has become the driving force behind an economic expansion that recently entered a record 11th year and shows little sign of ending. The biggest threat: The festering U.S-China trade dispute.
Market reaction: The Dow Jones Industrial Average DJIA, -1.05% and S&P 500 SPX, -0.90% were set to open lower in Friday trades. Stocks fell on Thursday after President Trump threatened to apply more tariffs to Chinese goods in September amid a stalemate in talks over trade rules.
The 10-year Treasury yield TMUBMUSD10Y, -0.83% also sank after the tariffs were announced. The yield dropped to 1.85% from 2.05% a day earlier.

Source: MarketWatch

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