Economy Adds 255K Jobs in July, Beating Expectations
The American economy added an impressive 255,000 jobs in July, beating forecasts.
The Hill reports:
The unemployment rate held at 4.9 percent for the second straight month, the Labor Department said Friday.
Strong jobs growth should boost the chances for Clinton, the Democratic nominee, to win the White House in November, especially if wages continue to rise. Strong economic numbers portend well for the incumbent party in presidential races.
Mark Hamrick, the senior economic analyst at Bankrate.com, said that as long as “the economy remains relatively firm through November, that would seem to bode well for Hillary Clinton, who is seen offering continuity and, dare I say, a steady hand.”
Government employment showed signs of life in July, rising by 38,000, the most in a year.
Mark Zandi, chief economist of Moody’s Analytics, said the jobs report was almost exactly what economists hope to see.
Douglas Holtz-Eakin, president of the American Action Forum, said the report is the “first month in recent memory that doesn’t have some significant downside.”
“This report features impressive top-line job growth with 255,000 new payroll jobs but evidence of earnings growth is even more notable,” Holtz-Eakin said.
Jason Furman, chairman of the Council of Economic Advisers, said the report brings the number of private sector jobs added since early 2010 to 15 million over a record 77 straight months of growth.
So far this year, earnings for private-sector workers have increased at an annual rate of 2.9 percent. Wage growth over the past year is tied for the fastest 12-month pace since the start of the economic recovery, Furman said.
Overall, average hourly wages rose last month were 2.6 percent higher than a year ago, the best pace since the economic downturn. That increase is a good sign for workers as the labor market tightens and the competition for skilled workers picks up.
Meanwhile, the labor market is averaging an increase of 186,000 jobs month this year, which is slower than the average of 229,000 new jobs in 2015.
“Nevertheless, more work remains to sustain faster wage growth and to ensure that the benefits of the recovery are broadly shared, including investing in infrastructure, implementing the high-standards Trans-Pacific Partnership, raising the minimum wage and guaranteeing access to paid parental leave,” Furman said.
President Obama said this week he is confident that Congress will pass the TPP before he leaves office. But Speaker Paul Ryan (R-Wis.) threw cold water on that suggestion, saying on Thursday that he doesn’t think the Obama administration can build enough support to make a lame-duck vote possible.
Business groups like the National Association of Manufacturers are making their case that the TPP is needed to help the economy.
“To grow jobs in America, manufacturers need their products sold to more markets,” said NAM President and CEO Jay Timmons.
“Isolationist rhetoric will not help grow manufacturing jobs in the United States, but the right policies will.”
Clinton and Republican nominee Donald Trump are both opposed to the TPP.
Joint Economic Committee Chairman Dan Coats (R-Ind.) said that the July report “is welcome news, especially after last week’s dismal second quarter GDP growth estimate, but we need a sustained period of strong job growth to improve confidence in the ongoing economic recovery.”
“Reducing burdensome regulations and updating our outdated tax code would untie the hands of job creators and allow them to hire more workers, which would help our economy reach its full potential,” Coats said.
Still, jobs growth is expected to throttle back this year as the economy heads toward full employment.
Zandi said as long as wage growth is picking up, a slight slowdown in monthly jobs growth shouldn’t be a factor in the election.
“They know the economy from their own prism and perspective, and they know if the economy is good or not good,” Zandi said.
“Most are thinking about it from the context of their pay,” he said.
The figures for the previous two job reports were revised upward on Friday. In total, job creation in May and June was 18,000 more than first reported, the Labor Department said.
May’s job growth rose to 24,000 from 11,000, and June’s jobs figure was even stronger, rising to 292,000 from 287,000.
In the past three months, job gains have averaged 190,000 per month.
Manufacturing added 9,000 jobs last month and construction tacked on 14,000. Professional and business services added 70,000 jobs for a total of 550,000 jobs in the past 12 months.
In July, healthcare employment increased by 43,000, and the sector has added 477,000 jobs in the past year.
Employment in financial activities rose by 18,000 in July and has risen by 162,000 over the year.
Mining jobs fell 6,000 for total losses of 220,00 since a peak in September 2014.
Photo credit: The Store Starters.