The data in the July employment report were not only uniformly strong in their internal components, but the prior month’s jobs data were revised upward, ruling out the risk of a recession in the near-term.
The headline number was 255,000 jobs added to nonfarm payrolls in July, which blew past expectations of 180,000, according to a consensus estimate by Thomson Reuters. The labor force participation rate also edged higher and the broader measure of underemployment, known as U-6, held at 9.7 percent. Average hourly earnings were up 0.3 percent, a slight acceleration, which is good news for consumer income and spending.
The so-called household survey, a separate measure that determines the official unemployment rate, showed the unemployment rate held at 4.9 percent and that more than 400,000 jobs were added last month — even stronger than the payrolls survey.
That suggests we may be in what’s often called a “Goldilocks economy,” when the economy is not too hot and not too cold — but just right.
Economists have hailed the report as unblemished, good news for all.
The recent strength in employment adds to the growing list of economic data that suggest the U.S. can weather the global economic storms raging around the world, from the persistent slowdowns in China and Japan, the post-Brexit volatility in Europe and weakness in other global economies.
And, the report just may give the Federal Reserve a reason to resume normalizing interest-rate policy.