US unemployment rate falls to 3.9 per cent as hiring slows

And sporting goods, hobby and toy stores shed 32,000 jobs, by far the most on records dating back to 1990. That is the result of the Toys R Us bankruptcy, economists said.

Excluding those factors, hiring in July would have been closer to the monthly average this year.

The government also revised hiring totals for May and June to show that another 59,000 jobs were added in those months.

“This job growth is nothing to be disappointed about, particularly at this stage of the recovery,” said Martha Gimbel, director of economic research at job search website Indeed. The economy is now entering its tenth year of expansion, and hiring has actually accelerated this year compared with 2017, surprising most analysts.

Stocks rose moderately after the report was released. The Dow Jones industrial average increased 82 points in mid-day trading to 25,408.

Average hourly pay gains remained modest, increasing 2.7 per cent from a year earlier, the same as the previous two months. That has puzzled Federal Reserve Chairman Jerome Powell and many economists. Typically, when unemployment has fallen below 4 per cent in the past, wages have increased at a faster pace.

With rising gas prices pushing up inflation, Americans actually saw their inflation-adjusted pay decrease in the past year. Consumer prices rose 2.9 per cent in June from a year earlier, more than the average wage gain.

One cloud on the horizon has been the Trump administration’s trade fights with China, the European Union, Canada and Mexico. The White House has slapped tariffs on steel and aluminum and on $34 billion of imports from China, and several companies have hit U.S. imports with retaliatory duties.

Yet the trade fights didn’t appear to impact hiring last month. Manufacturers, among the most directly affected by the import taxes, added 37,000 jobs, the most in seven months.

Manufacturers have likely benefited from oil and gas drillers nearly doubling their investment in drilling rigs and other structures this spring. That’s boosted factory output of steel pipe and other drilling equipment. The new spending follows a 60 per cent jump in oil prices in the past year.

Companies say they are struggling to find workers, with job openings higher than the number of unemployed for the first time in decades.

In response, many firms appear to be giving part-time workers longer hours. The number of part-time workers who would prefer full-time work has fallen nearly 13 per cent in the past year and now stands at 4.6 million. That’s the fewest in 11 years.

And the underemployment rate — which includes discouraged workers no longer searching for work, as well as involuntary part-time workers — dropped to 7.5 per cent, the lowest in 17 years, from 7.8 per cent.

Brian England, the owner of BA Auto, a car repair shop in Columbia, Maryland, would like to add another technician and an apprentice to his 18-member staff.

Yet auto repair work requires more technical skills than the past because of the increasing concentration of computers and electronics in newer cars. He also wants his mechanics to have teamwork skills because complex repairs can require more than one worker.

He has raised starting pay roughly 10 per cent in the past two years, from $60,000 to between $65,000 and $70,000.

“The more you make an employee healthy and happy, the more that they’re going to stay with you,” England said.

Lower-skilled workers are also benefiting from companies’ demand for labour. The unemployment rate for those without a high-school diploma fell to 5.1 per cent, the lowest on record.

The economy is projected to grow at about a 3 per cent pace for the rest of the year, which would likely mean that growth for all of 2018 would top 3 per cent for the first time since 2005.

Christopher Rugaber, The Associated Press

by Canadian Press

US unemployment rate falls to 3.9 per cent as hiring slows

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