A long list of U.S. statistics today confirmed a steady if not expansive recovery in the world’s largest economy with the one primary weakness in workplace compensation.
American employers hired 209,000 workers in July after a 298,000 gain in June that added 10,000 on revision, according to the Labor Department in Washington. It was the sixth month in a row of more than 200,000 new jobs, the strongest stretch of employment creation since there first half of 1997. Economist in the Bloomberg survey had forecast that 230, 00 new positions would surface. The unemployment rate rose to 6.2 percent form 6.1 percent as increasing jobs and the end of unemployment insurance for some prompted more people to look for work.
Average hourly compensation was unchanged in July and just 2.0 percent higher on the year. With CPI inflation running at 2.1 percent in June and the Fed’s preferred measure core PCE at 1.5 percent in July there is little left over in the household budget to increase consumption. Average weekly hours were unchanged at 34.5 where they have been for five months.
Economists hope that the gains in hiring will allow people to spend more and begin a cycle where more consumption encourages companies to seek new workers whose spending in turn raises consumption.
Manufacturing expanded in July at the fastest rate in more than three years.
The Institute for Supply Management reported that the index rose to 57.1, the best level since April 2011 from 55.3 in April. Readings above 50 indicate growth.
The new orders and employment components were particularly strong. Orders came in at 63.4 up from 58.9 a month prior and at the best level since December. Employment jumped 5.4 points to 58.2, the best reading in over three years.
Labor force participation rose 0.1 percent to 62.9 percent, still next to its modern era low at 62.8 percent. Personal income and spending each rose 0.4 percent in June as predicted.
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