Friday, October 31, 2014
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

  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    Solano News

     
    Home: Some things never change

    By Mayrene Bates | From Page: A2, 1 Comment

    Holiday boutique set for weekend

    By Susan Hiland | From Page: A3

     
    Live Your Dream award applications due Nov. 15

    By Amy Maginnis-Honey | From Page: A3

     
     
    Victim of Tuesday traffic incident dies

    By Ian Thompson | From Page: A3, 7 Comments

    Transportation Info Depot opens Monday in Suisun

    By Amy Maginnis-Honey | From Page: A4, 3 Comments

     
    Salvation Army set to host Kroc Fest

    By Amy Maginnis-Honey | From Page: A4

     
     
    Deadline looms for vote-by-mail ballots

    By Amy Maginnis-Honey | From Page: A5

     
    Fairfield police log: Oct. 28, 2014

    By Susan Hiland | From Page: A5

    Suisun City police log: Oct. 28, 2014

    By Susan Hiland | From Page: A5, 1 Comment

     
    .

    US / World

     
    Pentagon orders 21-day Ebola quarantine for troops

    By The Associated Press | From Page: A1, 2 Comments

    US health care unprepared for Ebola

    By The Associated Press | From Page: A1

     
    California orders risk-based Ebola quarantine

    By The Associated Press | From Page: A1, 55 Comments

    Suge Knight, Katt Williams charged with robbery

    By The Associated Press | From Page: A4

     
    Military jet crashes in California, killing pilot

    By The Associated Press | From Page: A4

    Peshmerga troops cheered by fellow Kurds in Turkey

    By The Associated Press | From Page: A6

     
    New York, New Jersey look back 2 years after Sandy

    By The Associated Press | From Page: A6

    Russian rocket engines suspected in launch blast

    By The Associated Press | From Page: A6, 2 Comments

     
    Al-Qaida: IS should rejoin group and fight West

    By The Associated Press | From Page: A6

    Bill Clinton says voting is cure for polarization

    By The Associated Press | From Page: A6, 3 Comments

     
    Lava 100 feet from Hawaii home, nearing main road

    By The Associated Press | From Page: A6, 1 Comment

    Police: Man decapitates mother, is killed by train

    By The Associated Press | From Page: A6

     
    Army blows up houses, Egyptians evacuate near Gaza

    By The Associated Press | From Page: A6

    .

    Opinion

    Measure A helps students

    By Letter to the Editor | From Page: A7

     
    Jane Day for council: She cares

    By Letter to the Editor | From Page: A7

    Do you trust Spering?

    By Letter to the Editor | From Page: A7, 6 Comments

     
    Support for Spering, Moy

    By Letter to the Editor | From Page: A7, 1 Comment

    Measure A a simple choice

    By Letter to the Editor | From Page: A7, 1 Comment

     
    Mraz is desperate

    By Letter to the Editor | From Page: A7, 12 Comments

     
    We’ve got to stop meeting like this

    By Kelvin Wade | From Page: A7

    Editorial Cartoons: Oct. 30, 2014

    By Daily Republic Syndicated Content | From Page: A7

     
    Davenport, Pal, Spering best choices for vote

    By Letter to the Editor | From Page: A7

    Spering record not set straight

    By Letter to the Editor | From Page: A8, 4 Comments

     
    In support of Brian Thiemer

    By Letter to the Editor | From Page: A8, 2 Comments

    Debate was eye-opening

    By Letter to the Editor | From Page: A8, 3 Comments

     
    Vote for Catherine Moy

    By Letter to the Editor | From Page: A8, 3 Comments

    Tonnesen right choice for City Council

    By Letter to the Editor | From Page: A8

     
    Vote for Tonnesen

    By Letter to the Editor | From Page: A8

    Learn to say no

    By Letter to the Editor | From Page: A8

     
    Support for Bertani

    By Letter to the Editor | From Page: A8, 10 Comments

    Better uses for negative campaign mailer costs

    By Letter to the Editor | From Page: A8, 1 Comment

     
    Proposition 47 fails to advance state

    By Letter to the Editor | From Page: A8

    Mraz not best officer for council post

    By Letter to the Editor | From Page: A8, 3 Comments

     
    Moy is the leader we need

    By Letter to the Editor | From Page: A8, 1 Comment

    Vote for Moy; Vote for Fairfield

    By Letter to the Editor | From Page: A8, 4 Comments

     
    Time for something new: Integrity

    By Letter to the Editor | From Page: A8, 9 Comments

    Supports Timm for Fairfield council

    By Letter to the Editor | From Page: A8, 10 Comments

     
    Measure A a wise investment

    By Letter to the Editor | From Page: A8

    .

    Living

    Today in History: Oct. 30, 2014

    By The Associated Press | From Page: A2

     
    Community Calendar: Oct. 30, 2014

    By Susan Hiland | From Page: A2

    Horoscopes: Oct. 30, 2014

    By Holiday Mathis | From Page: A10

     
    My sister won’t talk to any of us, I’m worried about my nephew

    By Kathy Mitchell and Marcy Sugar | From Page: A10

    .

    Entertainment

    Taylor Swift talks books and music with kids

    By The Associated Press | From Page: B5

     
    ‘House of Cards’ actress Norment dies

    By The Associated Press | From Page: B5

    TVGrid

    By Daily Republic Syndicated Content | From Page: B5

     
    Orson Welles’ last film may finally be released

    By The Associated Press | From Page: B5

    .

    Sports

    Giants fans revel in victory

    By Marcus Lomtong | From Page: A1 | Gallery

     
    Giants ace Bumgarner wins World Series MVP

    By The Associated Press | From Page: B1

     
    Royals’ dream season falls short in World Series

    By The Associated Press | From Page: B1

     
    Bumgarner, Giants beat KC to win World Series

    By The Associated Press | From Page: A1, 5 Comments | Gallery

    Bumgarner, Giants beat KC 3-2 in Series Game 7

    By The Associated Press | From Page: B1

     
    Selig’s imprint seen in Game 7 of World Series

    By The Associated Press | From Page: B1

    Warriors whip Kings 95-77 in season opener

    By The Associated Press | From Page: B2

     
    Jose Canseco resting at home after shooting hand

    By The Associated Press | From Page: B2

     
    Sacramento breaks ground on new Kings arena

    By The Associated Press | From Page: B2

    It’s Thursday Night Lights for SCAC

    By Paul Farmer | From Page: B2

     
    49ers rookie center Marcus Martin to make NFL debut

    By The Associated Press | From Page: B2

    Stanford men looking to build on NCAA tournament run

    By The Associated Press | From Page: B2

     
    Carr prepares for tough test vs. Seahawks

    By The Associated Press | From Page: B3

    Vanden’s McDaniel repeats as SCAC singles champion

    By Daily Republic staff | From Page: B3

     
    .

    Business

    Gov’t pushes air bag maker on replacement parts

    By The Associated Press | From Page: A6

     
    Fed ends bond buying and cites brighter job market

    By The Associated Press | From Page: A6

    .

    Obituaries

    Hardie Lee Doshier

    By Nancy Green | From Page: A4

     
    Howard Lenowsky

    By Nancy Green | From Page: A4, 1 Comment

    .

    Comics

    Wizard of Id

    By Daily Republic Syndicated Content | From Page: A9

     
    Blondie

    By Daily Republic Syndicated Content | From Page: A9

    Baldo

    By Daily Republic Syndicated Content | From Page: A9

     
    Pickles

    By Daily Republic Syndicated Content | From Page: A9

    Peanuts

    By Daily Republic Syndicated Content | From Page: A9

     
    Get Fuzzy

    By Daily Republic Syndicated Content | From Page: A9

    Zits

    By Daily Republic Syndicated Content | From Page: A9

     
    B.C.

    By Daily Republic Syndicated Content | From Page: A9

    For Better or Worse

    By Daily Republic Syndicated Content | From Page: A9

     
    Baby Blues

    By Daily Republic Syndicated Content | From Page: A9

    Beetle Bailey

    By Daily Republic Syndicated Content | From Page: A9

     
    Dilbert

    By Daily Republic Syndicated Content | From Page: A9

    Frank and Ernest

    By Daily Republic Syndicated Content | From Page: A9

     
    Sally Forth

    By Daily Republic Syndicated Content | From Page: A9

    Garfield

    By Daily Republic Syndicated Content | From Page: A9

     
    Rose is Rose

    By Daily Republic Syndicated Content | From Page: A9

    Word Sleuth

    By Daily Republic Syndicated Content | From Page: A10

     
    Crossword

    By Daily Republic Syndicated Content | From Page: A10

    Cryptoquote

    By Daily Republic Syndicated Content | From Page: A10

     
    Bridge

    By Daily Republic Syndicated Content | From Page: A10

    Sudoku

    By Daily Republic Syndicated Content | From Page: A10