For the second consecutive month, the Labor Department released a report showing much stronger than expected U.S. monthly job growth.
The report released by the Labor Department on Friday showed that non-farm payroll employment surged up by 255,000 jobs in July after jumping by an upwardly revised 292,000 jobs in June.
Employment had been expected to increase by about 185,000 jobs compared to the addition of 287,000 jobs originally reported for the previous month.
The much stronger than expected job growth seen over the past two months came after employment edged up by just 24,000 jobs in May.
The Labor Department pointed to notable job growth in the professional and business services, health care and social assistance, and leisure and hospitality sectors. Government employment also continued to rise.
Even with the stronger than expected job growth, the unemployment rate held at 4.9 percent in July. The unemployment rate had been expected to edge down to 4.8 percent.
The unemployment rate held steady as the household survey measure of employment soared by 420,000 jobs, but the number of people in the labor force also shot up by 407,000.
The report also said average hourly employee earnings climbed by $0.08 or 0.3 percent to $25.69 in July, although the annual rate of growth was unchanged at 2.6 percent.
"The outcome of today's report is supportive of the view that we could see a rate hike before year-end – we have had a couple of Fed officials this week suggest that this is possible," said ING economist James Knightley.
He added, "Nonetheless, we have our doubts it will happen given the mixed nature of the U.S. data flow and political uncertainty relating to the election, while external risks remain a possible constraint."
After raising interest rates by a quarter point last December, the Federal Reserve has left rates unchanged at each of its past five meetings. The Fed is scheduled to hold its next meeting toward the end of September.
by RTT Staff Writer
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