Nonfarm payrolls grew by 310,000 in July, far exceeding expectations, according to figures released today by the
. The household unemployment rate remained steady at 4.3%, and average hourly earnings rose 0.5%.
The strength of these figures makes it all but academic that the
will raise rates Aug. 24, the next time it meets to make decisions on monetary policy. The Fed hiked the fed funds target rate to 5% from 4.75% at its last meeting June 30.
Economists were expecting 199,400 in new nonfarm payrolls in July, according to
, and an increase in average hourly earnings of just 0.3%. The forecast for the unemployment rate was 4.3%.
The bond market fell quickly on the news, as another rate hike looks like it's in the cards now. The market's been thinking seriously about an August hike since Fed Chairman
testimony, when he outlined his concerns with the tightness in the labor market.
The rise in average hourly earnings plays into the Fed's belief that wage pressures are taking hold in this tight labor market. On a year-over-year basis, average hourly wages are rising at a 3.8% rate. That's still lower than the 4.3% rate at this time last year, but higher than the 3.7% rate recorded in June. Average hourly wages rose by 6 cents to $13.29 in July, up from June's $13.23 figure.
The rise in hourly earnings can be attributed to the growth in manufacturing employment, in a sector that had shed jobs for 17 straight months -- except for last September, when striking
workers returned to the factory floor. Employment in this sector rose by 31,000 for the month, compared with a revised 36,000 decline in June. The growth indicates that revived demand for manufactured goods has finally given a lift to the sector's job market. The rise in jobs in this sector could have contributed to a greater-than-expected rise in hourly earnings, as factory workers are generally higher-paid than service workers.
The average weekly workweek was steady at 34.5 hours, in line with expectations, but the manufacturing workweek rose to 41.9 hours, compared with 41.7 in June.