"Despite a roaring US labor market, average wage growth remains stubbornly muted", said Dr. Andrew Chamberlain, chief economist with job search site Glassdoor, in a report. It has declined five-tenths of a percentage point this year and is now at the most recent Fed median forecast for 2017.
"Following the disappointing ISM surveys for July, released earlier this week, this employment report provides reassurance that the real economy remained solid at the start of the third quarter", said Michael Pearce, U.S. economist at Capital Economics. "It's worth paying those higher wages"," Eric Rosengren, president of the Federal Reserve Bank of Boston, said in a interview this week. "Are we going to see more wages increase for USA workers?"
This jobs report will only make Americans feel more optimistic about the economy. If it continues, central bankers will likely feel compelled to mark down their estimate of longer run unemployment, thus providing reason to slow down the expected pace of rate increases for 2018.
Another continual worry spot is wage growth, which remains sluggish. The unemployment rate slipped to 4.3% from 4.4%, retouching a 16-year low.
In May, the government added 37,000 jobs, though it was unusually strong for the year.
"There's still lots of people coming back into the labor force, looking for jobs", said Steve Rick, chief economist at CUNA Mutual, an insurance firm. Manufacturing firms hired 16,000 workers.
There are still some underlying signs of softness in the labor market.
Statistics Canada says the province's unemployment rate last month was 6.6 per cent, up from 6.5 per cent in June. Wage growth should eventually pick up and return to more normal levels as the overall labor market improves.
"There's still questions about when we're going to see that spike" in wages, said Chris Gaffney, president of Everbank World Markets. The participation rate was as high as 67 percent until the 2001 recession, but has been falling since, particularly after the 2008 recession. Almost every state has some restriction on how late at night teenagers can work, so employers might not hire a high schooler if they need an evening shift covered.