On August 4, 2017, Labor Department released employment numbers for July of 2017, and in many areas, the news was better than anticipated. This had the associated positive effect on Wall Street on Friday, with the Dow Jones closing at a record high.
Overall, the report was very positive without being overly optimistic, referred to as a “Goldilocks report for the markets,” by Michael Gapen, chief United States economist at Barclays. These gains continue the positive labor movement the U.S. has seen since over the past few years.
Jobs grew in July by 209,000, almost 30,000 more than predicted by economists prior to the report’s release. The discrepancy gives evidence that the job market is growing faster than other signals might indicate.
Professional and business services added approximately 49,000 additional jobs, according to the Bureau of Labor Statistic. The largest boost, however, came from the restaurant and bar industry, contributing 53,000 jobs, contributing nearly a quarter of the month’s increase. Another 39,000 jobs were added in the healthcare sector. Retail experienced the slowest growth as brick and mortar stores bend under the pressure from e-commerce, adding only 900 jobs in the month of July.
Unemployment rates also fell in July, to 4.3 percent. While this is what analysts had predicted, it’s important to note that this is the lowest the rate has been since March of 2001.
Unfortunately, many of the gains came from part-time positions, which gained 393,000 positions while full-time positions actually dropped by 54,000.
Average hourly earnings were up 2.5 percent on a 12-month basis, adding to the measured positive report. In July itself, wages increased 0.3 percent, as compared to June’s 0.2 percent.
However, fast wage growth may signal the Federal Reserve that it’s time to begin tightening down monetary policy more quickly, putting a damper on recent Wall Street surges.
Adding to the largely good news in the July report were the revised numbers from June. That report was correct to 231,000 jobs gained, up from 222,000. However, May’s numbers were reduced from 152,000 to 145,000.