Published: Sat, August 05, 2017
Money | By Oscar Reynolds

July Jobs Report Exceeds Expert Predictions, Provides Momentum for Trump's Tax Reform

July Jobs Report Exceeds Expert Predictions, Provides Momentum for Trump's Tax Reform

The dollar rebounded Friday, posting its best daily gains since January, bolstered by a blockbuster report.

The Canadian economy added almost 11,000 jobs in July, the eighth consecutive month of growth, as the unemployment rate fell to its lowest point in almost nine years, Statistics Canada said Friday.

The labor-force participation rate edged up to 62.9% in July from 62.8% the prior month, but remains near the lowest share of adults working or seeking work since the 1970s.

But the drop in the labour force in June and July reverses a trend of solid growth seen from February to May. Employment growth has averaged 184,000 per month thus far this year, in line with the average monthly gain in 2016 (+187,000).

Average hourly earnings increased by 9 cents to $26.36, after a 5-cent increase in June. Since the start of 2017, average hourly earnings have risen by 65 cents, or 2.5 percent.

This morning's jobs report from the Labor Department beat economists' predictions, showing the addition of 209,000 jobs last month. Overall, job gains are still concentrated in service industries like healthcare and hospitality as they have been for most of this decade. The unemployment rate ticked down to 4.3 percent from 4.4 percent.

"So, it's actually pretty unprecedented in our experience that on the one hand the labor market tightens, on the other hand wage inflation declines", Messmer said. The country has added 388,000 jobs since July 2016, a lot of them full-time.

Finally, it was projected that 183,000 jobs would be created over the month.

However, the positive job figures were dampened by the latest numbers on Canada's trade deficit, which ballooned to $3.6 billion in June from a shortfall of $1.4 billion the previous month. "And most economists would like to see wages rising more quickly".

NPR's Chris Arnold says that "this latest report suggests that the USA economy is in pretty good shape".

Cathy Barrera, the chief economic adviser for the online jobs platform ZipRecruiter based in Santa Monica, Calif., has been concerned about younger workers lagging behind since the recovery from the recession.

Instead, the focus will be on wage growth, or the lack of it, amid assertions that the labor market is so tight that workers should be getting more meaningful raises.

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