Monday, August 10, 2015
Continuing a trend of steady employment growth, the United States economy added 215,000 jobs in July, the Bureau of Labor Statistics said on Friday. The unemployment rate remained unchanged at 5.3%.
“Job growth is quite strong,” stated Jim O’Sullivan, chief economist at High Frequency Economics, a data analysis firm in New York. “This pace of employment growth is clearly strong enough to keep the unemployment rate trending down.”
Average hourly earnings rose 0.2%, marking a rebound after growth stalled in June. Wages have grown by 2.1% over the past year, below the Federal Reserve’s target of 3.5% annual wage growth, and not much more than the underlying rate of inflation.
While sluggish wage growth remains a pocket of weakness in the economic recovery, steady payroll gains averaging 242,000 per month over the past twelve months have led observers to consider a Federal Reserve interest rate hike as increasingly likely, according to The New York Times.
“We view this report as easily clearing the hurdle needed to keep the Fed on track for a September rate hike,” said Rob Martin, an economist at Barclays in New York. “The bar for not moving now is much higher.”
Although the Federal Reserve has not explicitly stated that they plan to raise interest rates in the near future, the US central bank has stated that it would raise rates when it has seen “some further improvement” in the jobs market. The Fed has not increased interest rates since 2006, and during the 2007-2009 recession, it lowered rates to historically low levels.