3 things to know about the July 2018 jobs report
Growth slows but the unemployment rate ticks down.
The U.S. economy added 157,000 jobs in July, growing at a slower rate than expected.
Here are some of the highlights from the report.
1. Fewer jobs added, a sign of a tightening labor market.
While growth was slower in July, the unemployment rate ticked down slightly to 3.9 percent, suggesting that the labor market was tightening.
Reuters: “The slowdown in hiring last month likely is not the result of trade tensions, which have escalated in recent days, but rather because of a shortage of workers. There are about 6.6 million unfilled jobs in the nation. A survey of small businesses published on Thursday showed a record number in July of establishments reporting that they could not find workers.”
Bloomberg: “U.S. hiring cooled in July after more-robust gains than previously reported, while the unemployment rate slipped back below 4 percent and wage increases remained subdued, reinforcing a picture of steady labor-market growth in line with the Federal Reserve’s outlook for gradual interest-rate hikes.”
2. Wages still lagging.
Paychecks grew tepidly from the previous month and are up just 2.7 percent compared to the same time last year, according to CNNMoney.
CNN Money: “‘With inflation running at a roughly 2% rate, that means that there's not a lot of financial wiggle room for many Americans,’” said Mark Hamrick, Bankrate.com's senior economic analyst. Economists will get another update on inflation next week when consumer and producer price indexes' are released.”
Time: “Average hourly earnings rose 0.3 percent from the previous month, also matching the median estimate of economists, though that was up from 0.1 percent in June. Wages have remained in a holding pattern below the highs of the last expansion, despite persistent complaints from employers that they’re struggling to find skilled workers and job openings near a record high.”
3. Certain industries see especially strong growth; others falter.
According to the Bureau of Labor Statistics, employment increased in professional and business services, in manufacturing and in health care and social assistance.
CNN Money: “Last month, the manufacturing sector added 37,000 jobs. Economists were watching manufacturing closely for signs of a drag from the Trump administration's escalation of trade tensions with China and allies. ‘It appears to be that the strength of fiscal stimulus measures are outweighing any kind of effect of trade tensions,’ said Josh Wright, chief economist at the software firm iCIMS.”
CNBC: “Health care and social assistance added 34,000, while restaurants and bars contributed 26,000. Construction also was an area of growth, with 19,000 new positions, despite a slowdown in housing numbers of late.”
Yet the subsector that had the biggest loss was hobby, toy and game stores, leading some economists to believe it could be the result of stores like Toys R Us going out of business.
Business Insider: “The gains in retail jobs ‘were offset by a decline of 32,000 in sporting goods, hobby, book, and music stores, reflecting job losses in hobby, toy, and game stores,’ the Bureau of Labor Statistics said.”
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