US economy adds 215,000 jobs, moving Fed closer to rate hike

Associated Press

WASHINGTON

The U.S. job market just demonstrated that it may be nearing full health more than six years after the Great Recession – and showed why the Federal Reserve may be about to raise interest rates from record lows.

July marked the latest month in a streak of solid hiring, with employers adding 215,000 jobs and the unemployment rate holding at a relatively low 5.3 percent, the government said Friday.

Monthly job growth has averaged 211,286 so far this year, a level suggesting that employers are confident the economy will continue to expand and require more workers in the coming months and years.

The government also said employers added 14,000 more jobs in May and June than previously estimated.

“Another solid jobs report suggests the economy is gaining strength and keeps the Fed on track to raise rates as early as the next meeting,” in September, Sal Guatieri, a senior economist at BMO Capital Markets, said in a research note.

The Fed has held its key short-term rate near zero since the financial crisis of 2008 to try to energize borrowing, investing and spending. But now the Fed is close to concluding that the economy is strong enough to withstand higher rates.

Still, many Americans remain anxious about the modest recovery.

The economy’s overall growth rate has remained lackluster at an annualized pace of 1.5 percent in the first of half the year, and pay raises have been sluggish, with average hourly earnings in July up just 2.1 percent from a year earlier.

Companies are laying off fewer and fewer workers, with the monthly average of people seeking unemployment benefits near a 15-year low. At the same time, roughly 8.3 million Americans are looking for work, and many others have given up.

Since the recession began in late 2007, 14.5 million people have left the job market, either abandoning their search for work, choosing to retire or staying in school longer.

The result is that the share of adults working has fallen to 59.3 percent, the lowest level in 31 years.