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US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February – the best six-month string in eight years.

At the same time, most economists don’t think the pace of job growth is enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one – a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent in June. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Americans’ paychecks, though, are barely growing. That helps give the Fed leeway to keep its benchmark short-term rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 69 points, and broader indexes also dropped. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

Encouragingly, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the kinds of figures that Fed policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise rates, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February – the best six-month string in eight years.

At the same time, most economists don’t think the pace of job growth is enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one – a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent in June. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Americans’ paychecks, though, are barely growing. That helps give the Fed leeway to keep its benchmark short-term rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 69 points, and broader indexes also dropped. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

Encouragingly, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the kinds of figures that Fed policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise rates, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February – the best six-month string in eight years.

At the same time, most economists don’t think the pace of job growth is enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one – a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent in June. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Americans’ paychecks, though, are barely growing. That helps give the Fed leeway to keep its benchmark short-term rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 69 points, and broader indexes also dropped. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

Encouragingly, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the kinds of figures that Fed policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise rates, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February – the best six-month string in eight years.

At the same time, most economists don’t think the pace of job growth is enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one – a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent in June. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Americans’ paychecks, though, are barely growing. That helps give the Fed leeway to keep its benchmark short-term rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 69 points, and broader indexes also dropped. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

Encouragingly, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the kinds of figures that Fed policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise rates, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February – the best six-month string in eight years.

At the same time, most economists don’t think the pace of job growth is enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one – a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent in June. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Americans’ paychecks, though, are barely growing. That helps give the Fed leeway to keep its benchmark short-term rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 69 points, and broader indexes also dropped. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

Encouragingly, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the kinds of figures that Fed policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise rates, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February – the best six-month string in eight years.

At the same time, most economists don’t think the pace of job growth is enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one – a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent in June. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Americans’ paychecks, though, are barely growing. That helps give the Fed leeway to keep its benchmark short-term rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 69 points, and broader indexes also dropped. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

Encouragingly, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the kinds of figures that Fed policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise rates, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February – the best six-month string in eight years.

At the same time, most economists think the pace of job growth isn’t enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one – a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Still, Americans’ paychecks are barely growing. That gives the Fed leeway to keep its benchmark interest rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 70 points and broader indexes also fell. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

In one encouraging sign, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if it was available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the figures that Federal Reserve policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise them, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — U.S. employers extended their solid hiring into July by adding 209,000 jobs. It was the sixth straight month of job growth above 200,000, evidence that businesses are gradually shedding the caution that had marked the 5-year-old recovery.

July’s gain was less than in the previous three months, though, and probably wasn’t strong enough to suggest that the Federal Reserve will soon raise interest rates to curb inflation.

But the Labor Department’s monthly jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Along with the consistent job growth, consumer spending is rising, manufacturing is strengthening and auto sales are up.

The unemployment rate ticked up in July to 6.2 percent from 6.1 percent as more Americans started looking for work. Most didn’t find jobs, but the increase suggests that they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Average job gains over the past six months reached 244,000 in July, the best such monthly average in eight years.

“Job growth slowed in July after heated gains in the past three months,” Sal Guatieri, senior economist at BMO Capital Markets, noted in a research note. “But hiring trends remain solid, reflecting a strengthening economy.”

Stock market indexes fell in early-afternoon trading. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

The pickup in hiring has yet to translate, however, into larger paychecks for most Americans, a factor that has hobbled the recovery. In July, average hourly earnings ticked up just a penny to $24.45. That’s just 2 percent higher than it was 12 months earlier and is slightly below current inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

The proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 35-year low to 62.9 percent. It was the first increase in four months.

Weak pay gains are restraining the housing market, usually a key driver of growth. A measure of signed contracts to buy homes slipped in June, the National Association of Realtors said this week.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Still, Friday’s report echoes other data that point to an improving economy. Growth accelerated during the April-June quarter, the government said Wednesday, after contracting sharply in the first three months of the year. Last quarter’s rebound assuaged fears that growth was too weak to support this year’s rapid hiring.

And on Friday, the government said consumer spending and income picked up in June. A separate report showed that manufacturing expanded in July at the fastest pace in more than three years as new orders surged, production rose and factories ramped up hiring.

Investors remain wary, though, about whether the broad economic improvements will lead the Fed to raise its benchmark short-term rate sooner than expected. Such fears likely contributed to Thursday’s 317-point plunge in the Dow Jones industrial average – its worst day since February. Most economists still think the Fed will start raising rates around mid-2015, though some foresee an increase earlier in the year.

In addition to reporting July’s solid gain, the government on Friday revised up its estimate of job growth in May and June by a combined 15,000.

Higher-paying jobs showed broad increases in July. Manufacturing added 28,000 jobs, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain.

In the April-June quarter, the economy expanded at a seasonally adjusted 4 percent annual rate after a steep 2.1 percent contraction in the first quarter that was due largely to a brutal winter. Last quarter, Americans stepped up their spending, particularly on autos, furniture and other big-ticket items. Businesses also spent more on plants, office buildings and equipment.

Americans are also gradually gaining confidence in the economy, which means spending could accelerate in coming months. The Conference Board’s consumer confidence index jumped to its highest level in nearly seven years in July.

AP Economics Writer Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — U.S. employers extended their solid hiring into July by adding 209,000 jobs. It was the sixth straight month of job growth above 200,000, evidence that businesses are gradually shedding the caution that had marked the 5-year-old recovery.

July’s gain was less than in the previous three months, though, and probably wasn’t strong enough to suggest that the Federal Reserve will soon raise interest rates to curb inflation.

But the Labor Department’s monthly jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Along with the consistent job growth, consumer spending is rising, manufacturing is strengthening and auto sales are up.

The unemployment rate ticked up in July to 6.2 percent from 6.1 percent as more Americans started looking for work. Most didn’t find jobs, but the increase suggests that they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Average job gains over the past six months reached 244,000 in July, the best such monthly average in eight years.

“Job growth slowed in July after heated gains in the past three months,” Sal Guatieri, senior economist at BMO Capital Markets, noted in a research note. “But hiring trends remain solid, reflecting a strengthening economy.”

Stock market indexes fell in early-afternoon trading. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

The pickup in hiring has yet to translate, however, into larger paychecks for most Americans, a factor that has hobbled the recovery. In July, average hourly earnings ticked up just a penny to $24.45. That’s just 2 percent higher than it was 12 months earlier and is slightly below current inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

The proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 35-year low to 62.9 percent. It was the first increase in four months.

Weak pay gains are restraining the housing market, usually a key driver of growth. A measure of signed contracts to buy homes slipped in June, the National Association of Realtors said this week.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Still, Friday’s report echoes other data that point to an improving economy. Growth accelerated during the April-June quarter, the government said Wednesday, after contracting sharply in the first three months of the year. Last quarter’s rebound assuaged fears that growth was too weak to support this year’s rapid hiring.

And on Friday, the government said consumer spending and income picked up in June. A separate report showed that manufacturing expanded in July at the fastest pace in more than three years as new orders surged, production rose and factories ramped up hiring.

Investors remain wary, though, about whether the broad economic improvements will lead the Fed to raise its benchmark short-term rate sooner than expected. Such fears likely contributed to Thursday’s 317-point plunge in the Dow Jones industrial average – its worst day since February. Most economists still think the Fed will start raising rates around mid-2015, though some foresee an increase earlier in the year.

In addition to reporting July’s solid gain, the government on Friday revised up its estimate of job growth in May and June by a combined 15,000.

Higher-paying jobs showed broad increases in July. Manufacturing added 28,000 jobs, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain.

In the April-June quarter, the economy expanded at a seasonally adjusted 4 percent annual rate after a steep 2.1 percent contraction in the first quarter that was due largely to a brutal winter. Last quarter, Americans stepped up their spending, particularly on autos, furniture and other big-ticket items. Businesses also spent more on plants, office buildings and equipment.

Americans are also gradually gaining confidence in the economy, which means spending could accelerate in coming months. The Conference Board’s consumer confidence index jumped to its highest level in nearly seven years in July.

AP Economics Writer Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

US job growth eases but tops 200K for a 6th month

KDWN

WASHINGTON (AP) — U.S. employers extended their solid hiring into July by adding 209,000 jobs. It was the sixth straight month of job growth above 200,000, evidence that businesses are gradually shedding the caution that had marked the 5-year-old recovery.

July’s gain was less than in the previous three months, though, and probably wasn’t strong enough to suggest that the Federal Reserve will soon raise interest rates to curb inflation.

But the Labor Department’s monthly jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Along with the consistent job growth, consumer spending is rising, manufacturing is strengthening and auto sales are up.

The unemployment rate ticked up in July to 6.2 percent from 6.1 percent as more Americans started looking for work. Most didn’t find jobs, but the increase suggests that they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Average job gains over the past six months reached 244,000 in July, the best such monthly average in eight years.

“Job growth slowed in July after heated gains in the past three months,” Sal Guatieri, senior economist at BMO Capital Markets, noted in a research note. “But hiring trends remain solid, reflecting a strengthening economy.”

Stock market indexes fell in early-afternoon trading. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

The pickup in hiring has yet to translate, however, into larger paychecks for most Americans, a factor that has hobbled the recovery. In July, average hourly earnings ticked up just a penny to $24.45. That’s just 2 percent higher than it was 12 months earlier and is slightly below current inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

The proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 35-year low to 62.9 percent. It was the first increase in four months.

Weak pay gains are restraining the housing market, usually a key driver of growth. A measure of signed contracts to buy homes slipped in June, the National Association of Realtors said this week.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent – a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Still, Friday’s report echoes other data that point to an improving economy. Growth accelerated during the April-June quarter, the government said Wednesday, after contracting sharply in the first three months of the year. Last quarter’s rebound assuaged fears that growth was too weak to support this year’s rapid hiring.

And on Friday, the government said consumer spending and income picked up in June. A separate report showed that manufacturing expanded in July at the fastest pace in more than three years as new orders surged, production rose and factories ramped up hiring.

Investors remain wary, though, about whether the broad economic improvements will lead the Fed to raise its benchmark short-term rate sooner than expected. Such fears likely contributed to Thursday’s 317-point plunge in the Dow Jones industrial average – its worst day since February. Most economists still think the Fed will start raising rates around mid-2015, though some foresee an increase earlier in the year.

In addition to reporting July’s solid gain, the government on Friday revised up its estimate of job growth in May and June by a combined 15,000.

Higher-paying jobs showed broad increases in July. Manufacturing added 28,000 jobs, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain.

In the April-June quarter, the economy expanded at a seasonally adjusted 4 percent annual rate after a steep 2.1 percent contraction in the first quarter that was due largely to a brutal winter. Last quarter, Americans stepped up their spending, particularly on autos, furniture and other big-ticket items. Businesses also spent more on plants, office buildings and equipment.

Americans are also gradually gaining confidence in the economy, which means spending could accelerate in coming months. The Conference Board’s consumer confidence index jumped to its highest level in nearly seven years in July.

AP Economics Writer Paul Wiseman contributed to this report.

Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber