Solid job gains seen as boost to US economy

US employment increased at a healthy clip in July, with wages picking up, which should help to underpin consumer spending and boost the economy. The Labor Department’s closely-watched employment report yesterday showed that nonfarm payrolls increased by 255,000 jobs last month. While that would be a step down from June’s 292,000 surge, July’s gain is still above the average monthly advance of 171,500 jobs over the first half of the year. June’s robust hiring, which followed a mere 11,000 gain in May, was viewed as unsustainable given that the economic growth in the last three quarters averaged a one per cent annualized rate. Job growth will reinforce the Federal Reserve’s confidence in a labor market that officials view as at or near full employment, economists say. Fed chair Janet Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with population growth. “The Fed is likely to take encouragement from this jobs’ report as even a 180,000 print will still be consistent with further progress in absorbing labor market slack,” said Millan Mulraine, deputy chief economist at TD Securities in New York.

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