Published: Sun, August 05, 2018
Finance | By Gustavo Carr

Unemployment Rate Falls to 3.9 Percent

Unemployment Rate Falls to 3.9 Percent

The U.S. economy added 157,000 new jobs during the month of July - well below the 193,000 print analysts were projecting and also well below the revised 268,000 new jobs added in May (and the revised 244,000 new jobs added in June). This refutes the notion that the slower overall gain in jobs for the month reflected the impact of tariffs.

The unemployment rate fell 0.1 percentage point to 3.9% in July, the US Department of Labor said, near to the 18-year low it reached in May. The economy grew at 4.1 percent during the second quarter, its fastest place in almost four years.

"Homebuyers should feel a bit more confident today after the Bureau of Labor Statistics' employment situation report for July stated that the unemployment rate edged down", Mark Fleming, chief economist at First American, said in a press release. The idea that the labor market is becoming increasingly tilted to favor more educated workers does not appear to be supported by the employment data. As economic momentum continues, the labor force is still growing and unemployment is receding, resulting in a tick down in the unemployment rate and a rise in the employment-to-population ratio.

Employment by nondepository mortgage companies in June increased for the third consecutive month as seasonal hiring continued even though home resales inched down another notch.

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President Donald Trump's administration has imposed duties on steel and aluminum imports, provoking retaliation by the United States' trade partners, including China, Canada, Mexico and the European Union. Monthly payroll gains of around 100,000 or even as low as 80,000 are seen as sufficient to push down the unemployment rate over time.

Strong demand from consumers and businesses sharply reduced the stockpiles of goods held on many store shelves and warehouses. "There is such a thing as slack in labor markets being removed and scarcity puts upward pressure on prices somewhere", he said. The consensus on Wall Street calls for the central bank to raise rates twice more this year, in September and December. About 37,000 were added in manufacturing, 34,000 in healthcare and 26,000 in food services.

People looking for jobs at factories had a better chance of being hired last month. "America is working, the July employment numbers confirm that those who have been left behind over the past two decades are beginning to find their places in their search for the American dream". This article is strictly for informational purposes only.

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