Employers in the U.S. extended solid hiring during July by adding more than 209,000 more jobs. It was the sixth consecutive month of 200,000 or more jobs being added. This is evidence that companies are little by little shedding their fears that marked the recovery of 5 years.
However, the gains in July were less than those of the three previous months were, and likely were not strong enough to increase the fears the Federal Reserve might soon increase the interest rates to stave off inflation.
The rate of unemployment was up a notch to 6.2% from June’s reading of 6.1%, as there were more people in the U.S. who started to search for work.
The majority did not find work, but the increase has suggested they were more optimistic over their prospects than before.
Jobless individuals are not counted as being unemployed unless they are actively searching for work.
Average gains in jobs over the last six months reached 244,000 during July, the best average in the past 8 years.
The increase in hiring has not yet translated into bigger paychecks for the majority of Americans, which is a key factor that keeps hobbling the recovery.
During July, the average earnings per hour were up just 1 cent to $24.25.
The rate is only 2% higher than 12 months ago and just slightly below the 2.1% current inflation rate.
In an economy that is considered healthy, wages prior to inflation rise annually by between 3.5% and 4%.
Weak gains in pay have restrained the housing market, which is a key driver for growth. In June, the number of signed contracts to purchase homes dropped which suggests home sales would drop over the upcoming months.
Friday’s jobs report has echoed other recent data that points to the economy picking up pace. Growth during the quarter of April through June accelerated, said a government report on Wednesday, after contracting severely during the January through March quarter.
The bounce back last quarter eased fears that the growth in the economy was too weak to support the rapid hiring taking place this year.