U.S. employers added a solid 215,000 jobs in July, signaling a steadily rising job market and likely nudging the Federal Reserve closer to raising interest rates in September. The Labor Department also announced this morning that the unemployment rate held at a relatively low 5.3% for a second straight month.
As The Associated Press reports, monthly job growth has averaged 211,286 so far this year, indicating that employers are confident that the six-year recovery from the Great Recession will sustain strong consumer demand and require more workers. July’s job growth roughly matched expectations, and the early reaction on Wall Street before trading opened was muted. Stock index futures dipped, and U.S. government bond yields were little changed.
Hiring has remained robust even though the economy’s overall growth rate has been subpar and pay raises have been modest for many workers. Average hourly earnings in July increased just 2.1% from a year earlier.
The misgivings about the economy were on display Thursday night at the first Republican presidential debate, where 10 candidates in Cleveland discussed the challenges of an unwieldy tax code and the pressures on American workers resulting from immigration and global trade.
The economy grew at an anemic 1.5% annual rate in the first half of 2015—nearly half a percentage point weaker than the average of the past three years.
Roughly 8.3 million Americans are still looking for jobs. An additional 14.4 million people have left the job market—either abandoning their job searches or choosing to retire—since the recession officially began in late 2007. The result is that the share of adults working has fallen to 59.3% from 62.7% eight years ago.
One challenge is that workers have become less productive for each hour worked. This limits the willingness and ability of many companies to raise pay significantly, which can then prevent people sidelined by the recession from returning to the job market. Productivity fell at a 3.1% annual rate in the first three months of 2015.
