03/29/2024

Payroll Gain of 209,000, Wage Rise Show U.S. Labor Strength

Job gains were broad-based during July, led by the largest jump in leisure and hospitality employment since September 2015, a move driven by gains at restaurants. Hiring also hit five-month highs in manufacturing and education and health services. The drop in the jobless rate reflected a 345,000 rise in employed people in the household survey, while the number of unemployed was little changed.

Stronger household incomes and buoyant consumer confidence are helping to propel demand, while a rebound in global growth has provided more opportunities for American exporters. With job vacancies close to record highs, employers are reluctant to fire workers, keeping jobless-benefit claims near the lowest in four decades.

The acceleration in wages on a monthly basis may show that managers are finally starting to boost pay some more in a bid to keep or attract workers. Even so, the 2.5 percent pace of annual wage growth is little changed over the past two years, owing to factors including weak productivity, as well as people returning to the labor force and accepting lower-skilled work.

The solid job-market gains should at least keep household spending humming in the third quarter as the economy struggles to break out of a 2 percent growth pattern of the last several years. The July figures may also give a cleaner read on labor-market health after unseasonal weather and fluctuations in end-of-school year hiring muddied the picture over the past few months.

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