Yet more signs of an improving job market. The U.S. Labor Department says employers added 215,000 jobs last month.
That’s the third consecutive month of job gains above 200,000 following weaker than expected job growth earlier in the year. While the unemployment rate held steady at 5.3 percent, analysts say the July job gains increase pressure on the Federal Reserve to start raising interest rates soon.
As job reports go, July turned in a solid performance – with white collar jobs in retail, business services and health care leading the way.
Gad Levanon, managing director for economic outlook at the Conference Board, says that’s a good development that could ultimately lead to higher wages.
“The slack in the labor market is evaporating and we are getting to a tighter and tighter labor market which I think is good for employees, and at some point wages will accelerate. They have a better chance of finding a job that they like, so overall it's a good development," said Levanon.
Average hourly wages rose five cents from the previous month – up 2.1 percent from the same time last year. But you wouldn’t know it based on the reaction on Wall Street.
Stock prices on Wall Street slumped in early trading, but mostly because the July job numbers add pressure on the U.S. central bank to start raising interest rates. If the job gains continue next month – the Fed may have little choice – says Bankrate.com bureau chief Mark Hamrick – speaking to VOA on Skype.
"Fed officials like to talk about the fact that they are data-dependent, and, if we can hold them to their word on that, I think they will wait until the very last piece of data comes in before they decide to raise interest rates, but I do think it’s very much a possibility," said Hamrick.
Both analysts we spoke with predict an interest rate hike before the year ends.
"I think it makes it more likely that it will happen in September," said Levanon.
The Fed has kept the interest it charges other banks near zero since 2008 to bolster business and consumer spending. A September rate hike would mark the first increase in nearly a decade.