US Economy Adds 215000 Jobs in July, Federal Reserve to Hike Rates?

The report was not bad enough to derail the Fed’s and markets’ expectations for a rate hike this year, and it was not stellar enough to lock in a September rate hike.

“This is very supportive of a September rate hike by the Fed, ” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. Many economists on the street believe that the US economy would grow by close to 3 percent during the second half of the year. The 2.1% advance from July 2014 compared with a median forecast of 2.3%.

There has been an interesting shift in the age distribution of employment growth in the past year. But with the Fed’s next policy meeting barely a month away, and only one more jobs report to be issued before then, Yellen has a looming deadline. Whether these increases, most recently adopted in New York State but applied only to fast-food workers, will destroy jobs by making the unskilled too costly to hire, or increase jobs by adding to workers’ purchasing power, is the subject of a decidedly uncalm debate.

Job additions slowed but were still above 200,000.

Factory payrolls increased 15,000 as some automakers have decided to forgo a usual Summer plant shutdown for retooling.

And of course, there’s still one more jobs report due out on September 4. This sector has grown especially rapidly in the recovery adding 356,000 jobs in the last five years, an increase of 19 percent.

Lower gasoline and oil prices have yet to provide the kind of boost they have in the past. The broad-based pickup was accompanied by a flurry of orders, prodding more companies to beef up staff levels. And instead of spending the money saved because of cheaper gas, consumers have mostly pocketed the cash.

A strong dollar has also weighed on economic growth. The report will help the Federal Reserve to decide whether the U.S. economy is ready for it to raise interest rates from record lows as soon as September. The department revised the number in June to 231,000 and in May to 260,000. But many frustrated job seekers have stopped looking for work, perhaps only temporarily. “The bond markets didn’t see it that way though, as yields rose this morning”. The result is that the share of adults working has fallen to 59.3% from 62.7% eight years ago. While the stats weren’t anything to get excited about, Anderson acknowledged that “decent” job gains for the most part are a good “sign of progress”.

The unemployment rate held steady at a seven-year low of 5.3 per cent, as expected.

The national numbers were reflected in the latest monthly economic report by the Metropolitan Milwaukee Association of Commerce. Estimates of 96 economists ranged from gains of 140 000 to 310 000 after a previously reported 223 000 June increase. The strong employment data offers little reason to upend Federal Reserve Chairwoman Janet Yellen’s plan to lift rates, possibly at the next two-day meeting of the Federal Open Market Committee, which begins on September 16.

Retail led the industries adding to headcounts in July, followed by health care and leisure and hospitality.

A downward trend continues among local unemployment indicators. As recently as May, black unemployment was over 10%.