U.S. non-farm payrolls rise below expectations in July, jobless rate falls to 3.9 pct

Non-farm payrolls in the U.S. came in below market expectations in July. Payrolls rose 157k in the month, as compared with market expectations of a rise of 190k. Nevertheless, the disappointment is alleviated by the fact that the previous two months’ data were upwardly revised by adding 59k new jobs. The jobless rate dropped in the month to 3.9 percent. The labor force participation rate remained on to its June gain, staying at 62.9 percent in July.

Possibly the most encouraging sign of labor market strength is that core working-age individuals continue to be drawn back into the labor force. The participation rate for core age workers rose to 82.1 percent in July, continuing the rebounding trend seen in the last three years, noted TD Economics in a research report.

Hiring deceleration in July was concentrated in the services sector, which added 118k new jobs, down from 182k in June. Strength was recorded in business services, and health care and social assistance, food services and drinking places, and even the retail sector saw a 7k job gain.

Meanwhile, hiring in goods sector rose in July, rising 52k positions. Manufacturing added 37k new jobs, continuing a stable string of gains. Construction added 19k positions, up from June, while mining recorded a loss of 4k jobs.

Average hourly earnings rose 0.3 percent in July. On a year-on-year basis, wages growth stayed stable at 2.7 percent.

“With continued improvement in the participation rate and wage gains not yet showing signs of acceleration, the Fed can continue to be patient in raising rates. We expect the Fed to continue its steady interest rate increases in September”, stated TD Economics in a research report.

At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 67.4736. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex