The US economy managed to produce 209000 jobs in July. The level is well above the number needed to provide employment for new entrants into the US job market when retirements and morbidity is factored in. It means that US official unemployment remains well below the 5% level which many economists consider to represent full employment. The number of people out of work is now about 4.3% of the workforce. This means that official unemployment has dropped back to its lowest level since 2001.
The job creation figure was stronger than anticipated by economic experts and was boosted by job creation in the hospitality sector with the food and drinks sector creating some 53000 new jobs – the sector has expanded by 313000 since July of 2016. Amongst the other sectors of the US economy to see significant levels of job creation were the professional sector, health care and business services.
The Dollar enjoyed a boost, recently, partially on the back of the good jobs figures, but also (relative to Sterling and the Euro) because of deepening fears that the UK and the EU are heading towards a no deal Brexit which will harm both economies (with the UK taking a far greater hit).
Toyota and Mazda, the Japanese car manufacturing concerns, have announced Plans to produce vehicles in the US. The plans would see 300000 new vehicles produced on American soil and are likely to create 4000 additional jobs, bringing in an investment worth $1.6 billion.
The rolling average monthly job creation figure for 2018 stands at 184000. With the US economy theoretically at full employment, economists would expect to see increased pressure on wages as employers need to offer more attractive terms to get workers – this has yet to happen. It may reflect the fact that many workers in employment are on part-time hours and are seeking full-time positions. If this is so, then the more able and well qualified people in short hour or precarious jobs will be available to fill better contracts, causing a lag in wages growth until this slack has been absorbed.