The U.S. economy added 164,000 new jobs in July while the unemployment rate was unchanged at 3.7%, according to the latest estimates from the U.S. Bureau of Labor Statistics.
Notable job gains occurred in professional and technical services, health care, social assistance and financial activities.
The number of unemployed persons was flat compared with June at 6.1 million.
The labor force participation rate was 63.0%, little changed over the month and over the year.
Wages increased in July, rising on average by 8 cents to $27.98 per hour, following an 8-cent gain in June.
Over the past 12 months, average hourly earnings have increased by 3.2%.
Average hourly earnings of private-sector production and nonsupervisory employees increased by four cents to $23.46.
Volatility in the global markets in recent weeks has some concerned that a recession may be coming.
However, Odeta Kushi, deputy chief economist for First American, says “the economy exceeded growth expectations, expanding by 2.1 percent in the second quarter, and the payroll figures don’t suggest that a downturn is imminent.”
“Trade tensions continue to cause uncertainty and may further undermine economic momentum and consumer confidence, especially with the prospect of a 10 percent tariff on Chinese goods taking effect in September,” Kushi says. “The consumer side of the economy looks healthy as job gains continue, prompting higher wages. However, there has been a hit to manufacturing from trade tensions, which has resulted in an economy that’s reliant on one engine to sustain the expansion, and that’s U.S. consumers.”
Kushi notes that approximately 70% of U.S. economic growth is driven by consumer spending.
“The outlook for consumer economic strength remains strong, given that jobs are plentiful and wages are rising,” she says.
What’s more, low mortgage rates should help boost consumer house-buying power, she says.
Following the recent rate cut, “further decreases in mortgage rates could be on the way,” Kushi says.
“Combined with the strength of the labor market, potential home buyers may see their house-buying power continue to grow in the months ahead.”