US Added 209000 Jobs in July; Unemployment at 4.3%

And for years, the missing ingredient in the job report has been robust wage growth, although pay has occasionally jumped on a monthly basis. Now average hourly earnings are up a decent 2.5 percent on a 12-month basis.


In July, average hourly earnings rose 0.3 percent. That compares with an increase of 0.2 percent in June.

While faster wage growth is certainly good news for American workers, Wall Street worries that signs of real tightness in the labor market might force the Federal Reserve to tighten monetary policy more quickly. Very low interest rates have kept the financial markets buoyant, so any sign that the central bank’s easy-money policies are coming to an end could take some of the air out of stocks.

Mr. Gapen said the data confirmed that the Fed would most likely stick with the plan Wall Street has been anticipating: a reduction in its bond holdings in September as the central bank gradually reduces its stimulus efforts, followed by a rate increase in December.

To be sure, there were pockets of weakness. Retailers have been shedding jobs amid the growth of e-commerce, and in July stores added just 900 workers over all. Still, Mr. Gapen said, the retail weakness “was more than offset last month by gains in professional and business services, leisure and hospitality and health care.”

The President’s Reaction

President Trump lost little time in reacting to the report, hailing it on Twitter as “excellent” and saying, “I have only just begun.”

Even before the report was released, Mr. Trump had issued a series of early-morning tweets citing economic progress, including consumer-confidence soundings and plans by Foxconn and by Toyota and Mazda to build American plants.

The Background

For all the debate over President Trump’s tweets claiming credit for a strong economy and the rally on Wall Street, the bottom line is that the labor market is fairly healthy now — and was in recent years under President Barack Obama. Payroll gains averaged 180,000 in the first half of 2017, compared with 193,000 in the second half of 2016.

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The Markets Are Up, Unemployment Is Down. How Much Credit Should Trump Get?

President Trump has taken to Twitter to celebrate his handling of the economy. But how much credit can he really claim?


As a candidate, Mr. Trump pointed to the participation rate, which is at multidecade lows, and suggested that the true unemployment rate is much higher than is reported. In July, the participation rate stood at 62.9 percent, an increase from 62.8 percent in June and level with January, when he took office.

Although some of the decline in participation is due to the retirement of the baby boom generation, the participation rate for prime-age workers has also been weak.

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So while hiring and the overall unemployment rate continue to be important, an even better gauge of how Mr. Trump is handling the economy in the months ahead will be whether wages and labor participation both rise.

Correction: August 4, 2017

An earlier version of this article misstated the increase in average hourly earnings in July. It was 0.3 percent, not 0.4 percent.

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