209,000 jobs added in July, unemployment at 6.2 percent

Employers in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997 and a sign of optimism about the economic outlook. The jobless rate climbed to 6.2 percent as more people entered the labor force.

The 209,000 advance followed a 298,000 gain in June that was stronger than previously reported, figures from the Labor Department showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 230,000 increase. Wages and hours were unchanged from June.

The degree of hiring this year may help trigger a self- reinforcing cycle of gains in spending and job opportunities that will spur the economy. While the labor market has improved, Federal Reserve policy makers this week said they will keep interest rates low until wages accelerate and more discouraged workers find jobs.

“As you keep getting more and more job growth, you get more pickup in consumer spending, which will help in turn to drive GDP growth,” Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York, said before the report. “Wages can help a lot of things, including consumer spending, which at the end of the day will help the U.S. economy.”

Payrolls estimates in the Bloomberg survey of economists ranged from increases of 160,000 to 310,000. Revisions to prior reports added a total of 15,000 jobs to overall payrolls in the previous two months.

Stock-index futures held earlier losses after the report, with the contract on the Standard & Poor’s 500 Index expiring in September falling 0.2 percent to 1,921 at 8:35 a.m. in New York.

Consumer spending

Consumer spending rose in June by the most in three months, ending the quarter on a strong note and signaling that job growth will bolster the world’s largest economy, a Commerce Department report showed today.

Today’s employment report also showed average hourly earnings were unchanged at $24.45 in July. They were up 2 percent over the past 12 months. The average work week for all employees held at 34.5 hours.

Construction companies and factories were among those that added more to payrolls in July than a month earlier. Employment gains cooled at retailers, business services and education and health services.

The agency’s survey of households, used to derive the unemployment rate, showed more people entered the labor force. The so-called participation rate, which indicates the share of working-age people in the labor force, increased to 62.9 percent from 62.8 percent a month earlier, which matched the lowest since March 1978.

Service providers

Employment at private service providers increased 140,000 in July, the smallest gain in six months. The slowdown in hiring was broad-based in that category.

At the same time, goods producers took on workers at a faster rate. Construction companies added 22,000 workers and factory employment climbed 28,000 last month, led by a 14,600 gain in jobs at auto plants.

Economists surveyed by Bloomberg from July 3 to July 9 see the U.S. economy adding 215,000 jobs on average each month this year. That would be up the fastest pace of job growth since 1999, when the economy gained 265,000 jobs per month on average.

While the economy is creating more jobs, wage growth has lagged behind, increasingly becoming a focal point for Fed policy makers.

This story was originally published August 1, 2014 at 7:44 AM with the headline "209,000 jobs added in July, unemployment at 6.2 percent."