US economy gained 223,000 new jobs last month
The US economy added 223,000 new jobs last month, according to the latest Labor Department report.
However, wages remained flat, a sign that consumer spending is unlikely to rise.
In what can only be described as a mixed report, the Labor Department revealed that the US unemployment rate dropped to 5.3 percent – the lowest level in over five years. But the drop was mainly attributed to people dropping out of the labor market – people out of work stopped looking for jobs and were no longer counted as unemployed – as opposed to new hiring.
Average hourly earnings was flat at $24.95, only up 2 percent compared to last year.
Source: U.S. Bureau of Labor Statistics
Ted Wieseman, an economist at Morgan Stanley in New York, commented on the report:
“While we’ve been seeing positive signs of the economy picking up moving into the second half, this report certainly isn’t pushing the Fed to accelerate the liftoff timeline,”
The volatile household survey revealed that the labor force dropped by 432,000 in the month, which explains why the jobless rate declined.
All in all the results of the report suggest that the US economy is not yet at at a position where the US Federal Reserve would feel comfortable increasing interest rates.