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U.S. unemployment fell to 3.9% in July

05 August 2018

The Bureau of Labor Statistics will release the July jobs report at 8:30 a.m. ET.

The Labor Department said the unemployment rate ticked down to 3.9 percent from 4 percent.

"Non-farm payrolls increased by a more modest 157,000 in July but, with the gain in the preceding two months revised up by a cumulative 60,000, the labor market still appears to be in good health", said Paul Ashworth, chief US economist at Capital Economics.

The gains came from white-collar professional firms as well as manufacturing which filled 37,000 jobs. In May, unemployment hit 3.8 per cent, the lowest reading since April 2000. Faucher writes that as that happens, job growth will slow down because businesses will find it more hard to recruit new hires. Wages have remained in a holding pattern below the highs of the last expansion, despite persistent complaints from employers that they're struggling to find skilled workers and job openings near a record high.

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Overall, there were almost 5.5 million people in July who wanted a job but weren't counted as unemployed, which is a drop from over 5.7 million a year ago. "For the second consecutive month, the unemployment rate for Hispanics reached a record low", the statement added.

Economists had expected the jobs report to show nonfarm payrolls increasing by 193,000 on net.

Last month, Trump also saw a 4.1 percent GDP rate, the highest since 2014.

The BLS figures contrast with those of payroll services firm ADP Inc., whose employment report issued August 1 stated that USA private sector employment increased by 219,000 jobs in July.

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Nonbank mortgage employment estimates lag national jobs data by a month.

An increase in wages that occurred in June also could help the housing market even though it remains below the pre-recession rate of growth, he added.

Although the July hiring number fell below economists' expectations, the government revised the previous months' job gains by an additional 59,000. The new spending follows a 60 percent jump in oil prices in the past year.

President Donald Trump's administration has imposed duties on steel and aluminum imports, provoking retaliation by the United States' trade partners, including China, Canada, Mexico and the European Union. The U.S. central bank said "the labor market has continued to strengthen and economic activity has been rising at a strong rate".

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The gain in payrolls was concentrated at private employers, which added 170,000 jobs, while the public sector cut 13,000 positions.

U.S. unemployment fell to 3.9% in July