Continues to slow

Job growth continues to slow

By IAN KULLGREN

Job growth slowed for the second straight month in July, to 157,000 down from June's 248,000, providing fresh evidence that the economy has reached full employment.

But wage growth remained sluggish at 2.7 percent over the previous year, indicating that the tight labor market and the robust 4.1 percent second-quarter growth in GDP that a jubilant Trump administration announced last week still isn't showing up in paychecks.

The report was unwelcome news for President Donald Trump, who this week tweeted out a brisk increase in wages and benefits during the three-month period that preceded July and a favorable estimate from private payrolls. Last week, Trump declared the United States “the economic envy of the entire world” in response to the strong GDP numbers.

After a year of positive job growth, the economy could be on the verge of a “darker” turn, warned Mark Zandi, chief economist at Moody’s Analytics.

The report came after the Federal Reserve on Wednesday ignored Trump's recent criticism of interest rate hikes. Although the Fed didn’t raise rates, officials affirmed that they are still on track to do so twice more before the end of the year — a move likely to provoke further ire from the president.

“Overall, the report did little to change perceptions that the labor market is tight but has yet to begin overheating,“ Curt Long, chief economist for the National Association of Federally Insured Credit Unions, said in a statement. “And it keeps the Fed on track for a rate hike next month.”

The labor force participation rate — the share of people actively looking for a job — remained near 63 percent in July, close to its lowest level since the 1970s. The unemployment rate was 3.9 percent, down from 4 percent in June.

Labor Secretary Alexander Acosta put a positive spin on numbers, saying in a written statement that more than a million people have joined or rejoined the labor force since Trump’s election.

At the same time, “It is clear that wage growth must increase,” Acosta said. “Further wage increases will add a great benefit to the American workforce.”

The sluggish wage growth “is an obvious sign that the economy is not at full employment, and there are no indications that wage growth is accelerating,” the left-leaning Economic Policy Institute said in a statement.

Analysts surveyed by Bloomberg had predicted the creation of 190,000 jobs, an increase in over-the-year hourly earnings of 2.7 percent, and an unemployment rate at 3.9 percent.