USA job growth slows in July, unemployment rate dips

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"Non-farm payrolls increased by a more modest 157,000 in July but, with the gain in the preceding two months revised up by a cumulative 60,000, the labor market still appears to be in good health", said Paul Ashworth, chief USA economist at Capital Economics. Economists had expected a gain of about 190,000. Last week, the Commerce Department reported that gross domestic product expanded at an annual rate of 4.1 percent in the second quarter, the fastest pace in almost four years.

One signal that July was a strong month can be found in the low number of people filing for unemployment benefits for the first time. Economists' maintain that wages will rise as economy drains remaining slack from the labor market and businesses' pay more to retain workers. There are about 6.6 million unfilled jobs in the country. The economy grew at 4.1% during the second quarter, its fastest place in almost four years.

Wages remain the only red flag in the US labor market.

"The important point is that there is no sign of overheating but that aggregate wages and salaries (jobs x hours x earnings) are growing at a brisk pace", Neil Dutta, the head of United States economics at Renaissance Macro, said in a note.

Most of the jobs were added in the manufacturing and retail industries, with employers hiring twice as many people compared to this time previous year.

Trump to propose 25-pct tariff on $200b of Chinese imports
China immediately responded with its own tariffs on United States goods worth $34 billion. "This won't work on China", Geng said. In early July, the USA government imposed 25 per cent tariffs on an initial $34 billion of Chinese imports .

The gain in payrolls was concentrated at private employers, which added 170,000 jobs, while the public sector cut 13,000 positions. The U.S. central bank said "the labor market has continued to strengthen and economic activity has been rising at a strong rate". Manufacturers, among the most directly affected by the import taxes, added 37,000 jobs, the most in seven months.

The Hispanic unemployment rate dropped to 4.5 percent, the lowest level on record.

"This is not a labor market in which you're going to get your wish list candidate", Wright said.

Hary Bottka, senior vice president at Randstad Sourceright, which manages hiring for clients in the manufacturing, financial services and health care industries, says companies are increasingly thinking about converting contract workers, over time, to permanent employees. The year-over-year gain is unchanged at 2.7 percent. Mortgage rates have also increased in the past year, lifting monthly payments and making many homes even less affordable. Mining employment registered its first decline in 10 months in July (-4,000) but is likely to bounce back with higher energy prices propelling activity in the sector.

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