July 2018 Unemployment
Submitted by Atlas Indicators Investment Advisors on August 6th, 2018
America’s employment situation continues to be one of the most robust indicators Atlas watches. Another 157,000 net new jobs were added to the economy in July 2018 according to the Bureau of Labor Statistics. This increase came on the heels of strong releases in May and June; adding to their strength, both of these two months were upwardly revised as a combined 59,000 more jobs were added to the economy than earlier estimates counted. Finally, the unemployment rate dipped back below 4.0 percent to 3.9 percent in July.
Hiring was strong in many sectors of the economy. Manufacturers added 37,000 jobs. Health-care payrolls were 34,000 greater in the period. Construction companies tacked on 19,000 workers, and white-collar firms filled another 51,000 jobs. Food services and drinking places added to their upward trend, hiring 26,000 employees. Even retail trade turned higher in the period, increasing by 7,000 after falling in June.
Once again wage data participated in the upward bias of the report. Average hourly wages rose $0.07 to $27.05 and have improved 2.7 percent in the past twelve months. Private-sector production and nonsupervisory employees earned, on average, $22.65 an hour, increasing $0.03 in the period.
Labor conditions were strong enough to entice another large group of workers into the labor pool. America’s economy added 201,000 new workers in the period. This latest uptick follows 601,000 new entrants from June.
Generally speaking, the labor market looks very strong. Our economy has now put together a string of job gains for 94 consecutive months. Wages are improving but continue to do so at a pace which is unlikely to concern the Federal Reserve. Combined with a relatively robust expansion, America’s strong labor market will probably allow the nation’s central bank to continue increasing overnight interest rates at a predictable pace which in turn should support this ongoing virtuous portion of the business cycle. America’s expansion looks primed to persist.
