July 2018 Jobs Report

The latest report from the Bureau of Labor Statistics shows that 157,000 jobs were added to the economy in July. The largest gains were seen in health care, manufacturing and social assistance. Growth in manufacturing suggests that current trade tensions aren’t yet affecting the labor market.

Although economists projected that 190,000 jobs would be added in July, this jobs report is definitely not all bad news. The two previous months’ reports were revised up by a total of nearly 60,000 jobs, and the unemployment rate slid back down to 3.9 percent, closer to the 18-year low seen in May.

“It appears to be that the strength of fiscal stimulus measures are outweighing any kind of effect of trade tensions,” said Josh Wright, chief economist at the software firm iCIMS.

There is still a great deal of concern around wage growth, which grew only .3 percent from last month, and sits at a 2.7 percent increase over this time last year. The inflation rate is about 2 percent, so many Americans are not yet seeing the fruits of this growing economy. However, because there are more job openings than qualified candidates, employers may be forced to start increasing wages at a more rapid rate.

One important factor that a strong jobs forecast was the low number of people filing for initial unemployment benefits. First-time unemployment claims are an early sign of mass layoffs, but they were near a 50-year low when BLS conducted its survey for the July jobs report. In a statement on Wednesday, the Federal Reserve called the economy “strong.”

“Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low,” the Fed said. “Household spending and business fixed investment have grown strongly.” Therefore, a rate hike is still expected in September.