The U.S. economy might be more fragile now than it was last year, but it’s hard to tell by looking at the muscular labor market.The U.S. likely added 171,000 new jobs in July, returning the unemployment rate to a 50-year low of 3.6%, according to economists polled by MarketWatch. Here’s what to watch in the monthly employment report due Friday morning.
American manufacturers are growing at the slowest pace in three years and construction has tapered off after hitting a postrecession peak last year. The government, for its part, has not been adding many jobs. Low rate of layoffs Unemployment has hovered below 4% since January and it’s expected to fall a tick to 3.6% in July. The last time the jobless rate was that low was in 1969.Even if the unemployment rate rises, however, it’s unlikely to be a negative sign. The jobless rate often edges during the later stages of an economic expansion because more people are drawn back into the labor force in search of work. Initially they are counted as unemployed.
On the bright side, modest wage growth means low inflation and the continuation of very low interest rates.
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