US Unemployment Drops Slightly; Job Growth Slows
The Labor Department says the U.S. economy added 157,000 jobs in July, less than the expected gain of 190,000 economists had predicted
The U.S. unemployment rate dropped slightly in July, while job gains were lower than many analysts predicted. Friday's report from the Labor Department shows the jobless rate fell one-tenth of a percent to 3.9 percent, one of the lowest figures in years. The world's largest economy also had a net gain of 157,000 jobs, which is less than the monthly average so far this year. Experts blamed some of the change on closing retail stores, but said the labor market remains tight, with more openings than jobs overall. A jobless rate of under 4 percent usually prompts employers to raise wages to attract and keep good workers; but, the newest figures show wages grew just 2.7 percent over the past year, which is slightly lower than the inflation rate, meaning that real wages are actually falling slightly. Peter Cramer, senior portfolio manager of Prime Advisors, says one reason wages are not growing faster is the large but shrinking pool of part-time workers who are getting longer hours or full-time work. In a VOA interview via Skype, Cramer says so far, there is little evidence that Washington's many trade disputes have hurt employment, but that could change if the bickering goes on for "six or eight months." PNC Bank chief economist Gus Faucher says the U.S. unemployment rate will probably fall to 3.5 percent by the end of the year. Faucher writes that as that happens, job growth will slow down because businesses will find it more difficult to recruit new hires. On Wednesday, the U.S. Federal Reserve, the nation's central bank, said the economy was "strong," an upgrade from its June assessment, which dubbed the economy "solid." The Fed also made clear it expects to raise interest rates in the coming months, going against President Donald Trump's demands for the independent body to keep rates steady. "I think the economy's in a really good place," Federal Reserve chairman Jerome Powell told NPR in July. Ahead of November's midterm elections, Trump likely will tout a strong economy as his Republican Party looks to maintain its grasp on the U.S. legislative chambers, the Senate and House of Representatives. Yet analysts warned this may not be a winning strategy. "If this was a prez [presidential election] year, these strong jobs reports would matter so much more for the elections," CNN election analyst Harry Enten said Friday on Twitter. "As is, the economy is not strongly correlated with midterm outcomes."