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U.S. jobless rate drops to 3.9%. in July; 157000 new jobs created

05 August 2018

United States job growth slowed more than expected in July as employment in the transportation and utilities sectors fell, but a drop in the unemployment rate suggested that the labour market was tightening. But in June, Minnesota's unemployment rate was below the national average at 3.1 percent. Typically, businesses raise wages when it's hard to find the talent they want, but annual wage growth remained at a tepid 2.7 percent, the Labor Department said.

Commenting on the report, Mark Hamrick, Bankrate.com's senior economic analyst, said, "While attention immediately diverts to the payrolls gain of 157K, coming in shy of expectations, upward revisions for May and June take some of the sting out".

The Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding the volatile food and energy components, increased 1.9 per cent in June.

■ Average hourly earnings rose by 7 cents to $27.05.

The Trump administration cheered the jobs numbers on Friday as a sign its economic policies are continuing to boost growth and hiring.

The jobs data released on Friday followed a report that the USA trade deficit widened in June for the first time in four months as exports fell and imports grew.

The Federal Reserve upgraded its view of the economy this week, substituting "strong" for "solid" in the statement that policymakers released after their latest meeting.

That was just slightly higher than 3.8 percent, the 18-year low the nation reached in May.

Consumers are spending freely and businesses are stepping up their investment in buildings and equipment, accelerating growth.

■ 157,000 jobs were added last month.

"House price appreciation has exceeded wage growth for six years, so any signal that wage growth may be closing the gap is good news", said Fleming.

Manufacturing added 37,000 jobs, the most in seven months.

Yet the trade fights didn't appear to impact hiring last month.

Employment also fell marginally in logging and mining, a sector that includes the oil industry, as well as in financial services, leisure and hospitality and in government. Wages have remained in a holding pattern below the highs of the last expansion, despite persistent complaints from employers that they're struggling to find skilled workers and job openings near a record high. African-American and Hispanic unemployment rates are hovering around the lowest rates since the Labor Department began recording those statistics in the early 1970s.

U.S. jobless rate drops to 3.9%. in July; 157000 new jobs created