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Job Growth Strongest in Three Months
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From a business perspective, the combination of rising energy and labor costs increases the pressure to hike prices if possible. Many businesses, however, have been unable to do so because of competition.
From a worker's point of view, higher energy costs during the past year meant that wage gains barely outpaced inflation.
"Incomes rose solidly in July," said Stuart Hoffman, chief economist for PNC Financial Services Group. But, he added, "much of that extra income went into their gas tanks since gasoline prices rose by close to 7 percent [14 cents a gallon] last month."
The July job gains were shared among different racial and ethnic groups. The unemployment rate for whites was unchanged at 4.3 percent in July; the jobless rate among blacks fell to 9.5 percent last month from 10.3 pct in June; the Latino rate slid to 5.5 percent from 5.8 percent.
The biggest job gains were reported by retailers, who added nearly 50,000 workers, or about one fourth of the total. About 10,000 of those hires were made by auto dealerships, which were flooded with customers eager to take advantage of the latest promotions.
Manufacturers, however, trimmed their payrolls by 4,000 workers, including many at automakers that had scaled back production because of bloated inventories.
Meanwhile, the red-hot housing market continued to boost employment. Construction, real estate and lending combined accounted for about 25,000 new hires.
"As far as the Fed is concerned, payrolls growth is probably just about right -- not too hot and not too cold," said Paul Ashworth, senior international economist for Capital Economics Ltd.
