WASHINGTON • Employers added 215,000 jobs last month and the jobless rate held at a seven-year low of 5.3 per cent - signs of further progress in the United States labour market that could keep the Federal Reserve on the path to raising interest rates as early as next month.
The gain in payrolls last month followed a 231,000 advance in June that was larger than previously estimated, a Labour Department report showed yesterday.
Data showed a pickup in hours worked, but average hourly earnings climbed a less-than-expected 2.1 per cent from a year earlier, indicating little momentum in wage growth.
The persistent pace of hiring this year indicates companies are sanguine about prospects for demand in the face of a tempered global growth outlook. Better job security that leads to bigger wage gains could encourage consumers to spend more freely and provide more momentum for the economy.
" If you thought that the Fed was going to go in September, this report would suit that thematic nicely," said chief US economist Tony Porcelli at RBC Capital Markets in New York. "I think it's another step towards the eventual lift-off."
Fed chairman Janet Yellen and her colleagues will use yesterday's data to help decide the best time to raise the benchmark interest rate from near-zero, where it has been since 2008. The central bank said in a statement last week that it needs to see "some further improvement in the labour market" to help justify a rate increase, in addition to being "reasonably confident" that inflation would move back to its 2 per cent goal in the medium term.
The dollar gained against all but two of its 16 major peers, strengthening 0.5 per cent to US$1.0873 per euro at 9.02am in New York.
US Treasury yields were flat at 2.23 per cent, as were European benchmark German yields.
European stocks moved up slightly after the data. The prospect of higher rates has made non-interest-bearing gold less attractive.