- FOMC
US employment climbed at a solid pace last month and wages recovered after a surprise stall in the preceding month, adding to signs of an improving US economy that could open the door wider to a Fed interest rate lift in September. American employers created 215,000 jobs in July, slightly less than the 225,000 economists had expected to see. Nevertheless, the June data was revised up to 231,000, according to the Department of Commerce report. At the same time, the jobless rate remained at the lowest level of 5.3%. The unemployment rate is near the 5.0% to 5.2% range most Fed policy makers believe is consistent with a steady but low level of inflation. Meanwhile, the labour force participation stabilized at its multi-decade lows of 62.6% after a sharp 0.3 percentage point drop in June.
In addition, the average workweek increased to 34.6 hours, the highest since February, from 34.5 hours in June. Average hourly earnings rose five cents, or 0.2%, last month after being flat in June. That put wages 2.1% above their year-ago level, but left them well shy of the 3.5% growth rate economists associate with full employment. Still, the gain supports views that a sharp slowdown in compensation growth in the second quarter and consumer spending in June were temporary. A tighter jobs market should also produce higher wage growth, the Fed believes.
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