The U.S. unemployment rate remain unchanged in July, but analysts are firm in their outlook that the Federal Reserve will raise interest rates in September given the steady addition of jobs and improving wage conditions.
The Bureau of Labor Statistics said last Friday that both unemployment rate (5.3 percent) and the number of unemployed persons (8.3 million) were unchanged from the previous month, despite 215,000 jobs created in July from the construction and manufacturing sectors.
The biggest job generators in July were retail (36,000), healthcare (28,000) and professional and technical services (27,000). The mining sector, meanwhile , shed 5,000 jobs and has lost 78,000 since December 2014.
The BLS added that the average hourly wage in July rose by 0.2 percent or 5 cents to $24.99 and has risen by 2.1 percent over the year. For private-sector production and nonsupervisory employees, the rate increased by 3 cents to $21.01 last month.
Reuters said the additional jobs were short of the 223,000 that economists were expecting, while the wage increase is also short of the 3.5 percent associated with full employment. Overall, the July wage numbers were an improvement to the slowdown in the second quarter that analysts believed to be temporary, the wire agency said.
Reuters also noted that the May and June Reports have been revised to show that 14,000 more jobs were added and that average workweeks in July rose to 34.6, the highest since February.
The report added that while wage growth has been slow, it is expected to pick up given the improving job market and government agencies minimum pay hikes.
In addition, it was also noted that the number of people who have given up on looking for jobs have dropped to a seven-year low in July.
"We think this represents another solid employment report that meets the criteria for 'some further improvement' in the labor market and keeps the Fed in play for September," Michelle Girard, chief economist at RBS in Stamford, Connecticut told Reuters.
