Economy

US unemployment rate falls to 3.9 per cent as hiring slows

US unemployment rate falls to 3.9 per cent as hiring slows

Job gains, low unemployment, and flexibility in labor markets have lifted household optimism about the jobs market to its highest level since the early 2000s.

Update: Here's another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.

USA employers slowed their hiring in July, adding 157,000 jobs, a solid gain but below the healthy pace in the first half of this year. Last week, the Commerce Department reported that gross domestic product expanded at an annual rate of 4.1 percent in the second quarter, the fastest pace in almost four years.

The additional signs of strength in the job market could add to concerns the Federal Reserve would move to raise the key lending rate more aggressively.

Economists have warned that the tit-for-tat import duties, which have unsettled financial markets, could undercut manufacturing through disruptions to the supply chain and put a brake on the strong economic growth.

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

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Job growth at 157,000 in July was less robust than expected. That's below the 215,000 average for the first seven months this year, but economists said the decline will likely prove temporary. That kept the annual increase in wages at 2.7 percent in July. The economy created 59,000 more jobs in May and June than previously reported and needs to generate about 120,000 jobs per month to keep up with growth in the working-age population.

"It appears to be that the strength of fiscal stimulus measures are outweighing any kind of effect of trade tensions", said Wright from iCIMS. The economy is now entering its tenth year of expansion, and hiring has actually accelerated this year compared with 2017, surprising most analysts.

"Congress and the administration have taken important steps in recent weeks to tackle this challenge, but this jobs report is a reminder that more work needs to be done through partnerships with the private sector to solve the workforce crisis", she said. Faucher writes that as that happens, job growth will slow down because businesses will find it more hard to recruit new hires. That's the fewest in 11 years. Below that was outpatient care centers, adding 4,300 jobs.

Businesses are adding more hours for part-timers and converting contractors to full-time workers.

Among the unemployed, the number of people looking for work after losing or quitting their jobs fell by almost 290,000 to 1.8 million.