It’s barely enough to stay ahead of natural changes in the size of the labour market, but after a day like Thursday, it might be enough to stem the carnage on the financial markets.
American employers added 117,000 jobs in July, and the unemployment rate fell to 9.1 per cent from 9.2 per cent.
That’s better than the Wall Street consensus forecast for a payrolls increase of 85,000, based on the median estimate of a poll of expectations by Bloomberg News.
Since Thursday’s global market had more to do with a seismic shift in sentiment, rather than a specific change in economic conditions, a report that shows the U.S. economy is growing -- if only slowly -- might be enough to stop the charge for the exits.
Importantly, the Labor Department revised its estimates for payrolls growth in June and May higher. Employers actually added 46,000 jobs in June, according to the government -- poor, but an improvement on that terrible 18,000 figure that was initially reported.
Average hourly earnings rose 0.4 per cent, a decent increase that could encourage investors that consumer spending will pick up. Government austerity continued to way on the jobs numbers, as public payrolls decreased by 37,000. However, 23,000 of those job losses were the result of a partial shutdown of the Minnesota government. That has nothing to do with the underlying strength of the economy, and all those people are back at work.
But make no mistake: the U.S. labor market is weak. The share of the eligible population holding a job declined to 58.1 per cent, the lowest since July 1983.