Clear80° WeatherClear80° Weather

U.S. adds 209,000 jobs in July, unemployment rate ticks up to 6.2 percent

WASHINGTON — A sixth straight month of 200,000-plus job growth in July reinforced evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than the previous three months, the economy has produced an average of 244,000 jobs a month since February, the best six-month run in eight years.

At the same time, most economists believe the pace of job growth isn't enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still believe the Fed will start raising rates to ward off inflation around mid 2015.

The Labor Department's jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising. Manufacturing is expanding rapidly, and auto sales are up.

"There is no doubt that the economy and the labor market have been strengthening," said Sung Won Sohn, an economist at California State University. "People are rejoining the labor force.

"All these factors point to moderate but sustained economic growth in 2014."

President Barack Obama declared the economy "is clearly getting stronger. … Our engines are revving a little bit louder."

In an encouraging sign, more people without jobs have started to look for one, which nudged up the unemployment rate in July to 6.2 percent from 6.1 percent. Most who began searching last month didn't find jobs. But the increase suggests they're more optimistic about their prospects. Jobless aren't counted as unemployed unless they're actively seeking work.

Still, Americans' paychecks are barely growing. That gives the Fed leeway to keep its benchmark interest rate near zero without worrying so much about higher inflation.

In one encouraging sign, a higher proportion of July's job gains were in higher-paying industries. That's a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain.

Friday's other economic news

• U.S. stocks fell for a second straight day, adding to Thursday's massive selloff and giving the market its worst week in two years. The S&P 500 index lost 5.52 points, or 0.3 percent, to 1,925.15. The index fell 2.7 percent this week, its worst weekly performance since June 2012. The Dow Jones Industrial Average fell 69.93 points, or 0.4 percent, to 16,493.37.

• The University of Michigan said its index of consumer sentiment edged down to 81.8 in July from 82.3 in June.

• The Commerce Department said construction spending dropped 1.8 percent in June on a seasonally adjusted basis after rising by a revised 0.8 percent in May. It was the biggest setback since a 2.8 percent decline in January 2011.

• Consumer spending increased 0.4 percent in June on a seasonally adjusted basis, the Commerce Department said.

U.S. adds 209,000 jobs in July, unemployment rate ticks up to 6.2 percent 08/01/14 [Last modified: Friday, August 1, 2014 8:49pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...