US adds a robust 255K jobs; unemployment stays 4.9 pct

Up against expectations of adding 180,000 jobs in the month of July, 2016, the economy actually added 255,000 jobs and the unemployment rate remained unchanged at 4.9 percent. The Labor Department said the economy had added another 18,000 jobs over the two months. The unemployment rate remained a low 4.9 percent, the Labor Department said Friday.

Friday’s figures suggest that employers were unfazed by either the United Kingdom’s late-June vote to exit the European Union or the US economy’s tepid growth in the first half of the year: just 1 percent at an annual rate.

The July growth added to a 292,000 nationwide job increase in June is a big sign that the economy is on the upswing, say analysts.

US stocks are jumping Friday and are on pace to set records after a strong July jobs report gave investors more confidence that the economy is still growing. The labor market has now notched 70 consecutive months of job gains, as the last negative number came in September of 2010.

The nonresidential sector accounted for a majority of July’s gains, adding 11,500 net new jobs.

The U.S. government is expected to issue another solid jobs report Friday – and if it does, it would ease concerns that the economy is struggling.

Average hourly pay rose 0.3%.

Today’s level compares to a record low of 71.6 in April of 2008 and a record high of 164.72 in February 1985 when the price of gold bottomed at $284.25 an ounce.

Employment has been choppy this year, with paltry gains in May followed by a boom in June and July.

“Given that homebuilders are experiencing labor shortage, a transfer of work into construction could help more homebuilding, something that is critically needed to relieve the ongoing housing shortage”, Yun said.

Average hourly earning also rose 8 cents in July, to $25.69, another bullish sign for the job market. That’s a healthy improvement but still a slightly slower pace than past year, when it had gained about 1.6 million jobs by this point. Economic growth is expected to accelerate to at least a 2.5 per cent annualised rate in the third quarter. The fact that employment growth remains robust even when GDP grows at a 1% rate is disconcerting, as it implies that labor productivity is continuing to weaken from already anemic rates. The labor force grew by almost 2.2 million year-over-year, much healthier gains than the annual average of around 570,000 between 2007 and 2015, and the roughly 1.7 million gain last year, according to IHS Chief Economist Nariman Behravesh. Nor were they apparently discouraged by tepid growth in the first half of the year of just 1 percent at an annual rate.

But a broad measure of unemployment that includes people who want to work but have given up searching and those working part-time because they can not find full-time employment rose one-tenth of a percentage point to 9.7 percent last month.

Meanwhile, the London stock market rose 0.8 percent to above 6,800 for the first time in 14 months, as European equities built on earlier gains seen after the Bank of England Thursday announced an interest rate cut and surprise stimulus in response to the British vote to leave the European Union.