Washington: The US economy maintained solid job growth in July and the unemployment rate dropped to 16-year low, according to a data.
The total nonfarm payroll employment increased by 209,000 in July, beat market expectation of 180,000, according to data released by the Labor Department on Friday, Xinhua news agency reported.
The Labor Department revised down the job gains in May to 145,000, while the payroll gains in June was revised up to 231,000. With the revisions, job gains in May and June were 2,000 more than previously reported.
From May to July, the monthly job gains have averaged 195,000, considered as a healthy pace by many economists.
The labor force participation rate, which shows the share of working-age people in the labor force, edged up to 62.9 per cent from June’s reading of 62.8 per cent. The unemployment rate edged down to 4.3 per cent from June’s 4.4 per cent.
In July, the average hourly earnings rose 9 cents, or 0.3 per cent, to $26.36, faster than the 0.2 per cent in June. Over the year, average hourly earnings have risen by 2.5 per cent, the same growth as in June.
The better-than-expected job data is expected to clear the way for the Federal Reserve to initiate its plan to reduce its $4.5-trillion balance sheet.
In its July meeting, the Fed signaled that it would begin shrinking its balance sheet as early as September.
Most economists expect the Fed to begin shrinking its balance sheet in September, with a further rate hike in December, according to the latest survey conducted by the Wall Street Journal. The central bank will hold its next policy meeting on September 19-20.