164,000 new jobs logged in July

U.S. economy keeps expectations amid trade tensions

Recruitment coordinator Shamelly Pichardo (standing) gathers applicants at the Seminole Hard Rock Hotel & Casino Hollywood in June during a job fair in Hollywood, Fla. Employers slowed their hiring in July, adding 164,000 jobs, and the unemployment rate was unchanged.
Recruitment coordinator Shamelly Pichardo (standing) gathers applicants at the Seminole Hard Rock Hotel & Casino Hollywood in June during a job fair in Hollywood, Fla. Employers slowed their hiring in July, adding 164,000 jobs, and the unemployment rate was unchanged.

In a week when President Donald Trump suddenly cranked up trade tensions with China and the central bank moved to counter economic uncertainties, the American labor market offered a comforting steadiness.

The U.S. economy added 164,000 jobs in July, squarely in line with economists' forecasts and marking 106 straight months of job gains.

The unemployment rate remained at 3.7%, near a half-century low, according to the Labor Department report released Friday. Average hourly earnings rose 3.2% from a year ago, which is well above the rate of inflation, though below the level of wage growth that was seen at the end of the 1990s boom.

Lower-wage industries reported that average hourly earnings in those sectors jumped 4.6% from a year ago, considerably above the 2.5% pay gain for higher-wage industries, according to an analysis of the jobs report by Martha Gimbel, research director at Indeed Hiring Lab.

In July, several industry sectors posted solid gains. Health care added a robust 30,400 jobs. Restaurants and bars added 15,400 jobs. Local governments contributed 14,000 jobs, primarily in education. The finance and insurance industry added 13,900.

The manufacturing sector, though, has been struggling with declines in output. Manufacturers posted healthy gains of 16,000 jobs in July, though most of the growth was in the transportation sector that could soon be hit by auto plant layoffs.

Other areas showed some signs of weakness. Construction companies added just 4,000 workers. The transportation and warehousing sector added just 300 jobs. Retailers shed 3,600.

In Friday's report, the government revised down its estimate of job growth for May and June by a combined 41,000. Over the past six months, the economy has added jobs at a monthly average of roughly 141,000. That is down from a monthly average of 236,000 during the same period last year.

"An average of 140,000 jobs over the last few months isn't terrible, but is a definite slowdown from the numbers we saw last year," Gimbel tweeted.

Nearly all the job gains are coming from the service sector, not blue-collar jobs, a notable change from last year that could be a sign Trump's trade war is starting to bite certain industries.

Trump announced on Twitter this week plans to impose tariffs on all Chinese imports starting in September, a sharp escalation of trade tensions. Trump's earlier tariffs had been designed to affect business and industry and minimize the costs to the public by focusing on industrial goods. But the new tariffs will hit a vast range of consumer products such as smartphones, shoes and baby products, discouraging consumer spending.

The Federal Reserve has acted to try to sustain the expansion in part because some of the benefits are only now reaching America's lower-income communities. The Fed on Wednesday cut its benchmark interest rate for the first time in a decade to try to counter the impact of Trump's trade wars, stubbornly low inflation and global weakness.

As Trump's trade conflicts escalate, the economy and the job market could weaken. Recession fears could increase. But for now, hiring appears solid.

"We're really at a sweet spot despite all the negatives swirling around us," said Robert Frick, corporate economist at Navy Federal Credit Union.

The United States continues to have more job openings than unemployed, and employers are looking for ways to stand out to attract workers, including by raising pay and benefits.

"Wage growth should be higher if the labor market were truly at full employment," said Edward Al-Hussainy, a senior analyst at investment firm Columbia Threadneedle.

Wage gains have been strongest this year for workers earning $12 to $14 an hour and those at the top end of the pay scale who earn more than $60 an hour, according to a new analysis from the liberal Economic Policy Institute.

"If you don't like your job, this is a golden age to find a new one," said Ian Siegel, chief executive of ZipRecruiter.

In an encouraging sign, the number of Americans stuck in part-time jobs who want to work full-time fell below 4 million for the first time since before the recession, another sign that people are taking advantage of chances to move to better jobs.

Siegel said job seekers have a lot more power now that they realize it's a good time to ask for higher pay and more perks. On ZipRecruiter, job postings that offer flexible work schedules have more than doubled in the past year. Employers also are touting the training they offer as a perk for people who want to grow more in their career.

"One of the things we've seen is a big rise in on-the-job training being mentioned in job postings," Siegel said.

There is growing concern among economists that Trump's ongoing effort to put tariffs on other nations could dampen hiring in the second half of the year, although the White House is adamant that won't happen.

"The latest salvo from President Trump will accelerate the slowdown in job gains and the Federal Reserve will shave the interest rate again in September," said Sung Won Sohn, an economist at Loyola Marymount University and SS Economics.

Information for this article was contributed by Heather Long of The Washington Post, and by Josh Boak of The Associated Press.

Business on 08/03/2019

Upcoming Events