WASHINGTON (MarketWatch) — The U.S. labor market shows little sign of exhaustion nine years into an economic recovery as the economy added an impressive 209,000 new jobs in July.
The U.S. has created nearly 450,000 new jobs in the past two months, knocking the unemployment rate back down to a 16-year low of 4.3%.
Employment gains in July easily surpassed the 175,000 estimate of economists polled by MarketWatch. The Dow Jones Industrial DJIA, +0.11% fresh off another record, moved higher. Bond yields fell and the value of the dollar DXY, +0.83% rose.
A steady flow of new jobs has added fresh fuel to a recovery that is one of the longest on record. More Americans working and bringing home paychecks has spawned higher consumer spending and kept the economy on an even keel.
“The recovery is now strong and long enough to lift many of the people hurt most by the recession,” said Jed Kolko, chief economist at Indeed, a labor-market research firm.
President Trump quickly seized on the report, calling it “excellent.” A pro-business Trump administration has promised to slash regulations, cut taxes and take other steps to boost hiring and entice more companies to retain or set up operations in the U.S.
Excellent Jobs Numbers just released - and I have only just begun. Many job stifling regulations continue to fall. Movement back to USA!— Donald J. Trump (@realDonaldTrump)
Professional firms, health-care providers and restaurants accounted for the bulk of new jobs in July, the government reported Friday. Companies continue to find ways to beef up staff despite chronic complaints about a shortage of skilled workers.
Yet even with unemployment so low and good help hard to find, firms still aren’t boosting wages as fast as they usually do so late into an economic expansion.
Pay rose 0.3% in July to an of $26.36 an hour. But over the past 12 months, wages have risen just 2.5%, the same as in the prior month.
Wages usually rise 3% to 4% a year when an economy was is running at full throttle. But a slew of factors appear to be holding wages down, including low productivity, global competition and a reluctance among many Americans to switch jobs in the shadow of the Great Recession.
A robust labor market also keeps the Federal Reserve on track to raise U.S. interest rates again before year end. The central bank is already putting the final touches on a plan to wind down a multi-trillion dollar bond-buying spree put in place almost a decade ago to stoke the economy.
In July, restaurants and bars hired 53,000 people. Professional firms hiring mostly for white-collar jobs added 49,000 people. And health care companies increased staff by 39,000. Those firms accounted for almost 70% of the hiring last month.
Most other industries such as mining, manufacturing and construction only added a smattering of jobs.
Retailers increased hiring slightly, but they’ve actually lost jobs in the past 12 months. It’s the first time that’s happened since 2010 just as the economy was emerging from a deep recession. Internet retailers such as Amazon AMZN, -0.10% continue to eat away at traditional brick-and-mortar stores like Macy’s M, -1.19% as Americans increasingly turn to online shopping.
The government also raised its estimate of new jobs created in June to 231,000 from 222,000. May’s gain was reduced to 145,000 from 152,000, however.