U.S. adds 215,000 jobs in July
NEW YORK — America’s economy is in good but not great shape.
The U.S. economy added 215,000 jobs in July. Economists surveyed by CNNMoney predicted the economy would add 216,000 jobs. Anything above 200,000 is considered very solid.
The unemployment rate stayed the same at 5.3%, which is its lowest point since April 2008. That’s considered near full employment.
Wage growth — the missing piece to America’s economic progress — remained sluggish in July. Average hourly earnings only rose 2.1% compared to the prior year. Wage growth is the reason many Americans haven’t felt the benefits of the economy’s recovery. The Federal Reserve wants to see annual wage growth closer to 3.5%.
The jobs report is extra important now because the Fed is close to raising its key interest rate for the first time in over nine years. A rate hike would be a good sign for the economy’s health, and how far it’s come since the recession ended.
Although the Fed wants to see better wage growth before raising rates, wage growth isn’t a requirement. The Fed raised its key interest rate in June 2004 when average weekly earnings were 1.7% compared to the prior year. Average weekly earnings in July were 2.4%.
There is also encouraging news that unemployment for African-Americans is on its way down. It fell to 9.1% in July, a big drop from being over 10% in May. The Fed is looking for signs of continued improvement in the job market.
Economic growth has been okay this year — solid but nothing to get excited about. Last year, the economy added 240,000 jobs a month on average between January and July. This year that figure is 178,000 — a sign that job growth in isn’t as stellar.
Still, the economy is still making strides in the right direction.