Businesses hired a modest 157,000 workers in July as the nation’s unemployment rate ticked down to 3.9 percent, the Labor Department reported on Friday. The figures, while below economists’ expectations, reflect an economy still expanding beyond the rate needed to keep up with population growth.
On the other hand, hiring in May and June was even stronger than previously reported, with 268,000 and 248,000 jobs added, respectively.
Consumers are spending freely and businesses are stepping up their investment in buildings and equipment, boosting growth even as the economic expansion enters its tenth year. That’s raising demand for workers in industries ranging from manufacturing to construction to health care.
The economy expanded at a 4.1 percent annual rate in the April-June quarter, the strongest showing in nearly four years.
Mark Zandi, chief economist at Moody’s Analytics, said that data from payroll processor ADP showed that very large multinational companies actually cut jobs in July. That may reflect tariff concerns, he said, though it could also be a blip.
Moody’s helps compile ADP’s monthly jobs report, which was released Wednesday and showed that companies hired 219,000 new workers last month.
Typically, when the unemployment rate falls as low as it is now, businesses raise wages more rapidly to attract and keep workers. But average hourly pay has been rising very slowly. It increased 2.7 percent in July from a year earlier, the same annual pace as the two prior months.
That’s 3.5 percent to 4 percent growth that occurred during previous periods when the jobless rate has been this low.
And inflation has lately picked up, reaching 2.9 percent in June from a year earlier. That means that adjusted for rising prices, average hourly pay has declined a bit this year.