United States unemployment rate falls to 3.9 percent as hiring slows

Andrew Cummings
August 5, 2018

The latest data from the Bureau of Labor Statistics reveals that Americans at the bottom line of the USA economy are continuing to make large gains in employment. "This is only the eighth time that the monthly unemployment rate has fallen below 4.0 per cent since 1970, and three of those months happened under President (Donald) Trump in 2018", US Labour Secretary Alexander Acosta said in a statement on the July jobs report.

Education and health services added 22,000 jobs last month, the fewest since October 2017, after boosting payrolls by 69,000 jobs in June.

Individual state unemployment data is not expected to be released until August 17.

Although June typically is a busy month for home sales, purchases of pre-owned homes declined due to factors that include limited inventory, higher year-over-year mortgage rates and increases in home prices that outpaced wage growth.

Despite many businesses' trouble finding qualified workers, they are still hiring and looking outside traditional pools for talent.

But the unemployment rate is an incomplete indicator, as it excludes people who didn't look for work in the past four weeks. There are about 6.6 million unfilled jobs in the nation. Wages have remained in a holding pattern below the highs of the last expansion, despite persistent complaints from employers that they're struggling to find skilled workers and job openings near a record high.

Average hourly earnings rose by seven cents to $27.05, the bureau report said. Economists were watching manufacturing closely for signs of a drag from the Trump administration's escalation of trade tensions with China and allies. The Federal Reserve is on track to raise interest rates two more times this year and several times next year. Mining, wholesale trade, transportation and warehousing, information and financial activities remained mostly flat, the BLS said.

Strong demand from consumers and businesses sharply reduced the stockpiles of goods held on many store shelves and warehouses. Initial jobless claims were near a 50-year low in the week the BLS conducted its survey for the jobs report and haven't added up to more than 300,000 since March 2015.

Government employment fell by 13,000 jobs in July. The views expressed in this column are the author's own and do not reflect those of Berenberg Capital Markets, LLC.

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