WASHINGTON—The latest jobs report – showing 157,000 jobs gained in July – keeps the Federal Reserve on course to raise interest rates next month, says one economist.
"The July labor report showed employment gains that, when combined with upward revisions to prior months, remained on trend,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Wage growth was subdued once again and is barely keeping up with inflation. Overall, the report did little to change perceptions that the labor market is tight but has yet to begin overheating, and it keeps the Fed on track for a rate hike next month.”
The unemployment rate ticked down to 3.9% in July as the labor force expanded by 105,000 workers.
Next meeting in Late September
The Federal Open Market Committee (FOMC) left the federal funds target rate at 1.75% to 2% during its meeting earlier this month. The FOMC’s next two-day monetary policy meeting is set for Sept. 25-26.
In other report data, private-sector payroll employment increased 170,000 jobs during July. The goods-producing sector increased 52,000 jobs, while the service sector increased 118,000 jobs. Public sector employment decreased 13,000 from the prior month, Long noted.
Average hourly earnings increased seven cents to $27.05 in July. Over the last 12 months, wages are up 2.7%. Since 2009, year-over-year wage growth has averaged just 2.3%, Long said.