Job growth in the United States continued at a solid pace in July, with the economy adding 209,000 new jobs, the Labor Department said Friday.
Economists had expected an increase of about 230,000 jobs.
The unemployment rate was 6.2 percent, up from June's 6.1 percent. It has declined from a peak of 10 percent in October 2009, driven by job gains and a shrinking labor force.
Employment has now grown above a 200,000-jobs pace for six straight months for the first time since the technology boom in the late 1990s. The results improve upon June when nonfarm payrolls blew past expectations and rose by 288,000 new jobs.
Data for May and June were revised to show a total of 15,000 more jobs created than previously reported, showing underlying momentum and taking some of the sting from the report.
U.S. stock index futures pared losses on the report, while the dollar fell to a session low against a basket of currencies. U.S. Treasury debt yields dropped.
“It's a goldilocks report for an economy that is steadily expanding but not lifting off. It will reinforce for now the Federal Reserve's commitment to a gradualist policy approach,” said Mohamed El-Erian, chief economic advisor at Allianz in Newport Beach, California.
Average hourly earnings, which are being closely monitored as a potential signal of reduced slack that could prompt the Fed to raise rates, rose only one cent.
That left the annual rate of increase at 2.0 percent, still well below the levels that would make Fed officials nervous. Fed officials on Wednesday cautioned that “significant” slack remained, signaling patience on the rate front.
Friday's non-farm payroll and unemployment report bolster other recent upbeat employment data.
On Thursday, the Employment Cost Index, the broadest measure of labor costs, rose 0.7 percent. That was the largest gain since the third quarter of 2008 and followed a 0.3 percent increase in the first quarter.
The index is one of Fed Chair Janet Yellen's favorite labor market gauges and is being closely watched for clues on the timing of the first interest rate increase from the U.S. central bank.
Fed officials on Wednesday acknowledged the improvement in labor market conditions, but said "significant underutilization of labor resources" remained.¿¿Also on Wednesday, payrolls processor ADP reported that U.S. companies hired 218,000 workers in July, marking four straight month of private job growth above 200,000.
But, the figure fell short of what analysts projected and the previous month's level.
Reuters contributed to this report.Copyright © 2014, The Baltimore Sun