The U.S. economy posted higher-than-expected strong job growth in July, continuing a summer surge, though wage increases remained sluggish.
The Labor Department said employers added 209,000 jobs last month while the unemployment rate fell to 4.3% from 4.4% in June, matching May’s 16-year low.
Economists surveyed by Reuters had expected job growth of 183,000. June’s job growth numbers were revised up from 222,000 to 231,000, while May’s numbers were revised down from 152,000 to 145,000.
The number of employed Americans hit a new high of 153.5 million while the employment-to-population ratio also moved up to 60.2%, tied for the highest level since February 2009.
“Kind of an all-around strong headline number,” Tony Bedikian, head of global markets at Citizens Bank, told CNBC. “More people are coming into the labor force and finding jobs. It’s difficult to find anything really negative in the report.”
Average hourly earnings, meanwhile, increased by 9 cents, or less than 1%, to $26.36 in July. “While the average hourly wage has increased 2.5% year-over-year, economists said these gains are not quite as high as expected when paired with the low unemployment rate,” the Los Angeles Times reported.
Historically, wages have grown when the unemployment rate is below 5%, said Cathy Barrera, chief economic advisor for job search site ZipRecruiter.
According to the Times, the lagging wage growth could reflect job growth in traditionally lower-paid sectors, such as leisure and hospitality and the restaurant industry. The leisure and hospitality sector added 62,000 jobs in July, with 53,100 of those jobs coming from the bars and restaurants sub-sector.
Other sectors to show strong gains were professional and business services (up 49,000) and health care (up 39,000).
So far this year, job growth as a whole has averaged about 184,000 per month, compared with a 187,000 average monthly gain in 2016.
“I thought it was a strong report, basically a signal the U.S. economy is still growing at a strong pace,” Steve Rick, chief economist for insurer CUNA Mutual Group, told Forbes.