The U.S. economy added more than 200,000 jobs for a sixth straight
month, showing progress toward sustaining faster growth entering the
sixth year of expansion. The improving conditions drew more job seekers
into the labor force, pushing up the unemployment (USURTOT) rate. The 209,000 advance in employment in July followed a 298,000 June increase that was stronger than initially reported, figures from the Labor Department showed today in Washington. Unemployment climbed to 6.2 percent from 6.1 percent, while wages and hours were little changed from the prior month.
The degree of hiring this year may help trigger a self-reinforcing cycle of better spending and job opportunities that will spur the economy. Another report today showed manufacturing expanded last month at the fastest pace in more than three years, led by a surge in orders.
The jobs report “supports the case for continued economic growth, and continued growth in consumer spending, as well as an acceleration of both,” said Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, and the top payroll forecaster over the past two years in data compiled by Bloomberg.
Stocks fell, extending yesterday’s 2 percent decline in the Standard & Poor’s 500 Index, as concerns over Argentina’s default and Portugal’s Banco Espirito Santo SA overshadowed the jobs data. The S&P 500 dropped 0.6 percent to 1,919.61 at 12:54 p.m. in New York.
Workers carry a hose to pump concrete for a retaining wall as new homes are built in... Read More
Treasuries Climb
Treasuries rose, sending the yield on the benchmark 10-year note down to 2.49 percent from 2.56 late yesterday, as the increase in unemployment and subdued wage gains damped bets the Federal Reserve will move faster to reduce monetary stimulus.
Orders and production expanded last month at the fastest pace of the year as factories responded to increased purchases of automobiles and business equipment. The purchasers’ employment gauge climbed to the highest level in three years.
“This is clearly a nice bump,” Bradley Holcomb, the ISM survey chairman, said on a conference call with reporters. “It’s representative of the new orders stream that keeps coming in, and anticipation of more of the same as we go forward.”
Global Manufacturing
Related:
Manufacturing was also strengthening elsewhere. China’s
factories expanded in July at the fastest pace in more than two years,
another report showed. In the U.K., manufacturing grew last month at the
slowest pace in a year as cooling orders and output ended the first
half’s “stellar growth spurt,” according to a report from Markit
Economics. 
The degree of hiring this year may help trigger a self- reinforcing cycle of gains in... Read More
Construction companies and factories were among those that added more to payrolls in July than a month earlier. Employment gains cooled at retailers, business services and education and health services.
Dennis Haffner, 47, started a new job this week after 11 months of unemployment. He had $6.42 in his savings account and was staring down having to move in with his parents.
Just Hired
“This is what I’ve been looking for,” said Haffner, who lives in Manchester, Connecticut, and will be working in business process improvement at an insurance company. “Things fell into place.”He was seeing more employment opportunities toward the end of his search than at the start, he said.
“There was a lot of discouragement throughout the whole process,” he said. “Things didn’t really start to happen until the end of January, beginning of February, and then I saw an abundance.”
The jobless rate, calculated from a separate survey of households, climbed as 329,000 people joined the workforce, swamping the 131,000 increase in employment. The so-called participation rate, which indicates the share of working-age people in the labor force, increased to 62.9 percent from 62.8 percent in June, which matched the lowest since March 1978.
“Don’t even talk to us about mass unemployment out there, and discouraged people dropping out of the labor force,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in a research note. “This economy is strong.”
Consumer Spending
Another report today showed consumer spending rose in June by the most in three months, ending the quarter on a strong note and signaling that job growth will bolster the world’s largest economy, according to Commerce Department figures.The sustained gains in hiring “actually put some upside risk to consumption-growth outlook,” said Laura Rosner, a U.S. economist at BNP Paribas in New York. “The continuation of solid hiring is definitely a positive signal for the economy.”
Economists surveyed by Bloomberg from July 3 to July 9 see the U.S. economy adding 215,000 jobs on average per month this year. That would be the fastest pace of job growth since 1999, when the economy gained 265,000 jobs per month on average.
While the economy is creating more jobs, wage growth has lagged behind, increasingly becoming a focal point for central bank policy makers. Fed Chair Janet Yellen told lawmakers last month that while her view of the economy has turned “more positive,” she’s concerned about low participation in the labor force and sluggish wage growth.
Hourly Earnings
Today’s report showed average hourly earnings were little changed at $24.45 in July. They were up 2 percent over the past 12 months. The underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want to work but have given up looking -- rose to 12.2 percent from 12.1 percent.Federal Open Market Committee officials this week continued to pare monthly asset purchases as the job market strengthens and the threat of disinflation diminishes. Nonetheless, they said in a statement that “a range of labor-market indicators” has showed “significant underutilization of labor resources.”
Growing demand could cut into remaining slack.
Gross domestic product rose at a 4 percent annualized rate in the second quarter after shrinking 2.1 percent from January through March, Commerce Department figures showed this week. Gains in consumer spending and business investment spurred the rebound.
Auto Sales
Strong demand for cars is one reason New York-based aluminum maker Alcoa Inc. is hiring. A $300 million expansion at Alcoa Davenport, Iowa, facility led to 150 new full-time jobs, said Rob Woodall, manufacturing director at the plant.“This is following the growth in automotive, but this is also because of an expansion of the use of aluminum in automotive,” Woodall said during an interview at the facility, which boasts the world’s largest aluminum rolling mill.
“We’re continuing hiring” past the initial 150 as Alcoa’s workforce ages and demand strengthens, Woodall said. Alcoa is also adding automotive capacity in Alcoa, Tennessee. “This isn’t the only place we’re adding jobs.”
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