Tuesday, January 27, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

US job growth eases but tops 200K for a 6th month

By
From page B6 | August 02, 2014 |

WASHINGTON — A sixth straight month of solid 200,000-plus job growth in July reinforced growing evidence that the U.S. economy is accelerating after five years of sluggish expansion.

Employers added 209,000 jobs last month. Though that was fewer than in the previous three months, the economy has now produced an average 244,000 jobs a month since February — the best six-month string in eight years.

At the same time, most economists think the pace of job growth isn’t enough to cause the Federal Reserve to speed up its timetable for raising interest rates. Most still think the Fed will start raising rates to ward off inflation around mid-2015.

The Labor Department’s jobs report Friday pointed to an economy that has bounced back with force after a grim start to the year and is expected to sustain its strength into 2015. Economists generally expect it to grow at a 3 percent annual rate in the second half of this year after expanding 4 percent in the second quarter. Consumer spending is rising, manufacturing is expanding rapidly and auto sales are up.

“There is no doubt that the economy and the labor market have been strengthening,” said Sung Won Sohn, an economist at California State University’s Smith School of Business. “People are rejoining the labor force. All these factors point to moderate, but sustained economic growth in 2014.”

Speaking with reporters Friday afternoon, President Barack Obama declared that the economy “is clearly getting stronger. … Our engines are revving a little bit louder.”

In an encouraging sign, more people without jobs have started to look for one — a shift that nudged up the unemployment rate in July to 6.2 percent from 6.1 percent. Most of those who began searching last month didn’t find jobs. But the increase suggests they’re more optimistic about their prospects. The jobless aren’t counted as unemployed unless they’re actively seeking work.

Still, Americans’ paychecks are barely growing. That gives the Fed leeway to keep its benchmark interest rate near zero without worrying so much about higher inflation.

Investors were unimpressed by Friday’s data. The Dow Jones industrial average fell 70 points and broader indexes also fell. The yield on the 10-year Treasury note dipped, suggesting less concern about a Fed rate increase.

In one encouraging sign, a higher proportion of July’s job gains were in higher-paying industries. That’s a shift from much of the recovery, which has been marked by outsized gains in lower-paying fields such as restaurants, retail and home health care aides.

Manufacturing added 28,000 jobs in July, the most in eight months. Construction added 22,000 and financial services 7,000, its fourth straight gain. Accounting, bookkeeping and computer networking jobs also showed gains. And architectural and engineering jobs jumped 8,800, the most since January 2007.

“This is particularly important for new college graduates as it suggests that the market for individuals with higher education is finally firming,” said Diane Swonk, chief economist at Mesirow Financial.

Job growth is pushing up wages in some sectors. But the increases haven’t been widespread.

Ted Toth, vice president of a factory in Pennsauken, New Jersey, that makes parts for satellite, radar and GPS systems, says he has four available jobs that pay from $20 to $32 an hour. But he hasn’t been able to find employees qualified to fill them.

His company, Rosenberger North America, raised wages 6 percent earlier this year to fend off efforts by competitors to poach its employees.

“Everybody’s stealing from each other,” he said.

As hiring has increased and more people have begun seeking work, the proportion of working-age adults who either have a job or are looking for one rose slightly in July from a 36-year low to 62.9 percent. It was the first increase in four months.

The number of unemployed rose 197,000 to 9.7 million. Nearly three-fourths of that increase represented people who resumed their job hunts after previously giving up. The number of people who were unemployed because they had been laid off actually declined in July.

The lack of significant pay increases for most Americans has been a factor hobbling the recovery. Higher pay is needed to fuel consumer spending, which makes up nearly 70 percent of economic activity.

In July, average hourly earnings ticked up just a penny to $24.45. That was just 2 percent more than it was 12 months earlier and was slightly below inflation of 2.1 percent. In a healthy economy, wages before inflation would rise 3.5 percent to 4 percent annually.

Pay has failed to accelerate in part because many Americans are still uncertain about the economy’s long-term health, said Mike Schenk, a senior economist at the Credit Union National Association.

Schenk expects wages to pick up once the unemployment rate falls to around 5.5 percent — a level at which some businesses will have to increase pay to keep workers and some employees will be more confident asking for a raise.

“People are still bruised,” Schenk said. “I don’t think they feel comfortable, generally speaking, walking in and asking for raises at this point.”

Many more people are either out of work or are underemployed than the unemployment rate indicates, economists note. That can also keep a lid on pay.

Richard Moody, chief economist at Regions Financial Corporation, notes that 7.5 million Americans who are working part time would like full-time work, up from 7.3 million in January. An additional 2.2 million have stopped searching but would take a job if it was available.

On top of the 9.7 million people the government counts as unemployed, an additional 9.7 million either want a job or would like more hours. Combined, the three categories make up an “underemployment” rate of 12.2 percent.

That “is still far above any level that could be considered normal in a healthy labor market,” Moody said.

Those are the figures that Federal Reserve policymakers were reviewing at a meeting this week, after which they concluded that “there remains significant underutilization of labor resources.”

The challenge for the Fed is timing when to raise short-term rates. If it moves too soon to raise rates, the Fed risks choking off early signs of rising wages. If it acts too late to raise them, it risks causing inflation to surge.

Zach Pandl, a strategist at the financial firm Columbia Management, expects the Fed to start raising rates next spring.

“Wages are a lagging indicator, always the last piece of the puzzle in a recovery,” Pandl said.

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
Health officials report 1st Solano flu death

By Kevin W. Green | From Page: A1, 5 Comments | Gallery

 
 
 
American Legion Post schedules head-shaving fundraiser

By Kevin W. Green | From Page: A6

Rush Ranch seeks docents

By Kevin W. Green | From Page: A2

 
Dramas, thrillers lead week’s box office openings

By Amy Maginnis-Honey | From Page: B6

Vacaville Toastmasters welcome guests

By Amy Maginnis-Honey | From Page: A6

 
Kroc Health Fair offers free screenings

By Amy Maginnis-Honey | From Page: A1

 
Chipotle fundraiser to benefit Armijo newspaper

By Amy Maginnis-Honey | From Page: A6, 1 Comment

Vacaville council eyes earlier start time

By Ryan McCarthy | From Page:

 
.

US / World

Facebook suffers outage affecting users worldwide

By The Associated Press | From Page:

 
Private wells in California farm area show high uranium

By The Associated Press | From Page: B2

 
Ex-Army prosecutor found guilty of rape at court-martial

By The Associated Press | From Page: B2

 
Law enforcement wants popular police-tracking app disabled

By The Associated Press | From Page: B2

Gov’t to overhaul Medicare payments to doctors, hospitals

By The Associated Press | From Page: B2

 
Cuban youth build secret computer network despite Wi-Fi ban

By The Associated Press | From Page: B2 | Gallery

Seekers of the Hollywood Sign disrupt nearby neighborhood

By The Associated Press | From Page: A2, 1 Comment | Gallery

 
2 small planes crash-land off Hawaii; all aboard survive

By The Associated Press | From Page: B2

Report: State worker sent alarming notes before gun arrest

By The Associated Press | From Page: B2 | Gallery

 
Panic attack, bad back: Theater shooting brings jury excuses

By The Associated Press | From Page: B2

Lawyer: Boy Scout files depict ‘sordid’ history of abuse

By The Associated Press | From Page: B2

 
Dwindling group of survivors to mark Auschwitz 70 years on

By The Associated Press | From Page: B2 | Gallery

New Jersey’s Christie launches political action committee

By The Associated Press | From Page: B2

 
US drone strikes resume in Yemen despite turmoil

By The Associated Press | From Page: B2

Monster snowstorm swirls into densely populated Northeast US

By The Associated Press | From Page: B2 | Gallery

 
Kurds celebrate ousting Islamic State fighters from Kobani

By The Associated Press | From Page: B2

Man takes responsibility for drone over White House

By The Associated Press | From Page: B2 | Gallery

 
.

Opinion

2 sides to state highways rehab backlog

By Dan Walters | From Page: A11, 6 Comments

 
.

Living

Community Calendar: Jan. 27, 2015

By Susan Hiland | From Page: A2

 
.

Entertainment

Petty earns writing credit for Sam Smith’s ‘Stay With Me’

By The Associated Press | From Page: B3

 
National Cowboy Poetry Gathering begins in northeast Nevada

By The Associated Press | From Page: B3

Trainor and Styles write a duet about heartbreak

By The Associated Press | From Page: B3

 
Emma Watson to star in live-action ‘Beauty and the Beast’

By The Associated Press | From Page: B3

 
SAG Awards win sends ‘Birdman’ Oscar hopes soaring

By The Associated Press | From Page: B3

Cumberbatch says sorry for calling black actors ‘colored’

By The Associated Press | From Page: B3

 
A murder at the edge of the world takes ‘Fortitude’ to crack

By The Associated Press | From Page: B3 | Gallery

Lawyers: Melissa Rivers files lawsuit in mother Joan’s death

By The Associated Press | From Page: B3 | Gallery

 
Sundance Watch: ‘Cobain’ premieres, women talk Hollywood

By The Associated Press | From Page: B3

TVGrid Jan 27

By Daily Republic Syndicated Content | From Page: B7

 
.

Sports

Manfred knows he’ll get hit as commish _ his name is on ball

By The Associated Press | From Page: B1 | Gallery

 
NASCAR to leave championship format unchanged in 2015

By The Associated Press | From Page: B1

 
Kobe Bryant to have shoulder surgery, likely out for season

By The Associated Press | From Page: B1 | Gallery

Tim Brown hopes 6th time is charm in Hall of Fame vote

By The Associated Press | From Page: B1

 
Raiders sign Charles Woodson for 2015 season

By The Associated Press | From Page: B1

Rams notify St. Louis they’ll go year-to-year on dome lease

By The Associated Press | From Page: B1

 
Gamecocks still No. 1; Chattanooga joins women’s hoops poll

By The Associated Press | From Page: B1

Scott Dixon shines in masterful final drive in Rolex win

By The Associated Press | From Page: B1 | Gallery

 
LeBron, Cavs climb in standings, back in title conversation

By The Associated Press | From Page: B1

Capitals among East contenders; West race too tight to call

By The Associated Press | From Page: B1

 
Playoff not interested in moving semis of New Year’s Eve

By The Associated Press | From Page: B1

Fireworks help celebrate Venus Williams’ Australian Open run

By The Associated Press | From Page: B1

 
US women to host New Zealand, Ireland, Mexico, South Korea

By The Associated Press | From Page: B1

NBA D-League All-Star events set for Feb. 15 in Brooklyn

By The Associated Press | From Page: B1

 
AP Source: Los Angeles Kings release Mike Richards

By The Associated Press | From Page: B1

Hope Solo could be left off US World Cup roster

By The Associated Press | From Page: B1 | Gallery

 
.

Business

Employers: Agreement made on key issue in port labor dispute

By The Associated Press | From Page: B4

 
Lyft cars doing away with pink furry mustache

By The Associated Press | From Page: B4

 
Hard Rock (again) dips toe into Atlantic City casino market

By The Associated Press | From Page: B1

US stock market finishes with small gains

By The Associated Press | From Page: B4

 
IBM disputes report that big layoffs coming

By The Associated Press | From Page: B4

Union says California Kaiser nurses reach contract agreement

By The Associated Press | From Page: B4

 
Boeing, SpaceX will beat Russia on price for astronaut rides

By The Associated Press | From Page: B4 | Gallery

CBO: Deficit to shrink to lowest level of Obama presidency

By The Associated Press | From Page: B4

 
Eurozone looks for dialogue after stunning Greece elections

By The Associated Press | From Page: B4

S&P downgrades Russia credit rating to junk

By The Associated Press | From Page: B4

 
.

Obituaries

Donald Wesley Johnson

By Susan Hiland | From Page: A4

 
.

Comics

Rose is Rose Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Get Fuzzy Jan 27

By Daily Republic Syndicated Content | From Page: B4

Beetle Bailey Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
B.C. Jan 27

By Daily Republic Syndicated Content | From Page: B4

Cryptoquote Jan 27

By Daily Republic Syndicated Content | From Page: B5

 
For Better or Worse Jan 27

By Daily Republic Syndicated Content | From Page: B4

Dilbert Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Bridge Jan 27

By Daily Republic Syndicated Content | From Page: B5

Garfield Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Crossword Jan 27

By Daily Republic Syndicated Content | From Page: B5

Baby Blues Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Pickles Jan 27

By Daily Republic Syndicated Content | From Page: B4

Sally Forth Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Baldo Jan 27

By Daily Republic Syndicated Content | From Page: B4

Wizard of Id Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Word Sleuth Jan 27

By Daily Republic Syndicated Content | From Page: B5

Frank and Ernest Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Sudoku Jan 27

By Daily Republic Syndicated Content | From Page: B5

Blondie Jan 27

By Daily Republic Syndicated Content | From Page: B4

 
Zits Jan 27

By Daily Republic Syndicated Content | From Page: B4

Peanuts Jan 27

By Daily Republic Syndicated Content | From Page: B4