‘Robust’ jobs growth but ‘uninspiring’ wage gains to freeze Fed’s rate plans, economists say

Here are some comments from analysts about the July jobs report, which showed 157,000 jobs added in the month, and the unemployment rate falling to 3.9% from 4%. The monthly increase was below the MarketWatch forecast of 195,000.

• “In one line: Better than it looks; the core trend is still 200K-plus.” — Ian Shepherdson, Pantheon Macroeconomics

• Joseph LaVorgna of Natixis cited the upward revisions for May and June’s numbers and said the trend in jobs “remains robust.” And he said manufacturing jobs were “booming.” Manufacturers filled 37,000 jobs for the month.

• Jim O’Sullivan of High Frequency Economics said the data “remain more than strong enough for the Fed to keep tightening.”

• “June payrolls came in weaker than expected in July, but there was a significant upward revision to June (248K vs 213K). However, manufacturing payrolls were strong, AHE rose 0.3%, and the YoY reading on AHE was steady at 2.7%. So, taking the revision into account and the underlying details, this month’s report is very solid despite the disappointing optics of the headline.” — Thomas Simons, Jefferies LLC

• “Wages were up 0.3% in July, but a downward revision to the prior month meant that the annual pace is still tracking an uninspiring 2.7%. Today’s numbers are unlikely to do much to alter expectations for a rate hike at the Fed’s upcoming meeting or the pace of hikes thereafter. Little market reaction expected.” — Royce Mendes, CIBC Economics

• Greg Daco of Oxford Economics called wage growth “good but not great.”

• William Spriggs of the AFL-CIO noted the year-over-year growth in average hourly earnings of 2.7% and said it confirmed it was a “good idea” for the Fed to pause on raising interest rates at its meeting earlier this week.