WASHINGTON — The U.S. job market just demonstrated that it may be nearing full health more than six years after the Great Recession — and showed why the Federal Reserve may be about to raise interest rates from record lows.
July marked the latest month in a streak of solid hiring, with employers adding 215,000 jobs and the unemployment rate holding at a relatively low 5.3 percent, the government said Friday.
Monthly job growth has averaged 211,286 so far this year, a level suggesting that employers are confident the economy will continue to expand and require more workers in the coming months and years. The government also said employers added a total of 14,000 more jobs in May and June than previously estimated.
“Another solid jobs report suggests the economy is gaining strength and keeps the Fed on track to raise rates as early as the next meeting,” in September, Sal Guatieri, a senior economist at BMO Capital Markets, said in a research note.
The Fed has held its key short-term rate near zero since the financial crisis of 2008 to try to energize borrowing, investing and spending. But now the Fed is close to concluding that the economy is strong enough to withstand higher rates.
Still, many Americans remain anxious about the modest recovery. The economy’s overall growth rate has remained lackluster at an annualized pace of 1.5 percent in the first of half the year, and pay raises have been sluggish, with average hourly earnings in July up just 2.1 percent from a year earlier.
Some of those misgivings were on display Thursday night at the first Republican presidential debate, where the candidates talked of simplifying the tax code, slashing regulations and easing the pressures on American workers resulting from immigration and global trade.
“The jobs that once sustained our middle class — they either don’t pay enough or they are gone,” said Florida Sen. Marco Rubio, offering a perspective shared by many Democrats as well.
Companies are laying off fewer and fewer workers, with the monthly average of people seeking unemployment benefits near a 15-year low. At the same time, roughly 8.3 million Americans are looking for work, and many others have given up.
Since the recession began in late 2007, 14.5 million people have left the job market, either abandoning their search for work, choosing to retire or staying in school longer. The result is that the share of adults working has fallen to 59.3 percent, the lowest level in 31 years.
The pace of hiring has managed to help revive housing and auto sales, according to industry reports. Friday’s jobs report also suggests that employers anticipate higher consumer spending. Retailers added 35,900 workers in July and restaurants 29,300.
Rising home sales helped boost construction jobs by 6,000. Manufacturers added 15,000 jobs, with food, plastics and rubber factories accounting for most of the gain. Business services — a category that includes lawyers, accountants and engineers — added 40,000 workers, though the number of temporary employees on short-term contracts fell 8,900.
In New York, Paul Persiani recently turned his temporary job into a permanent position with a food manufacturer. An accountant by training, he lost a job last year and then spent his downtime upgrading his computer skills. It allowed him to command a higher salary in his new position at Materne North America.
“I’m a lot better off than a year ago due to the tricks I taught myself,” said Persiani, 30.
Overall, though, the strong dollar has slowed economic growth by making U.S. exports costlier overseas. And lower gasoline and oil prices have yet to deliver the kind of economic boost they have in the past.
Energy companies responded to oil below $50 a barrel by cutting orders for equipment and pipelines, prompting many manufacturers to slow their hiring. And instead of spending the money saved because of cheaper gas, consumers have mostly pocketed the cash.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
