US jobless rate drops to 3.9%. in July; 157,000 new jobs created

US jobs growth slows more than expected in July

American job growth falls short of expectations in July

The U.S. labor market remained in solid shape last month, adding 157,000 jobs while the unemployment rate ticked down to 3.9 percent and wage growth improved - although workers are still waiting for significant gains in their purchasing power because prices are also rising. US establishments added a net new 157,000 jobs, following the upwardly revised average gains in May and June of an outsized 258,000. The economy needs to create about 120,000 jobs per month to keep up with growth in the working-age population.

Meanwhile, the unemployment rate slightly dropped from 4-percent to 3.9-percent. The 3.9% unemployment rate suggests workers are in short supply.

The pace of hiring workers in the United States slipped to its slowest in four months in July, but interest rates remain on track to rise twice more this year because of the underlying strength of the jobs market. There are about 6.6 million unfilled jobs in the nation.

The economy expanded at a 4.1 per cent annual rate in the April-June quarter, the strongest showing in almost four years. Not since August 2001 have so many associate degree-holders and college dropouts held jobs in the labor force.

Neil Dutta, an economist at Renaissance Macro, said following Friday's report that, "The important point is that there is no sign of overheating but that aggregate wages and salaries (jobs x hours x earnings) are growing at a brisk pace". The job gains in June were revised higher. Construction gained 19,000 jobs, but retail trade only 7,000.

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"This is not a labor market in which you're going to get your wish list candidate", Wright said.

There have also been concerns that the trade tensions could dampen business confidence and lead companies to shelve spending and hiring plans. Initial jobless claims were near a 50-year low in the week the BLS conducted its survey for the jobs report, and haven't added up to more than 300,000 since March 2015.

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"While this increased employment is undoubtedly good news, job growth exacerbates the monumental manufacturing workforce shortage", she said.

"The vast majority of the jobs we're adding are in services, which tend to be low-wage sectors", said Megan Greene, chief economist at Manulife Asset Management.

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