Solid job growth expected for August
By CHRISTOPHER RUGABER
The Associated Press
WASHINGTON — U.S. employers likely hired at a healthy pace in August, emboldened by brisk consumer spending and an economy that keeps growing steadily.
Economists have forecast that employers added 189,000 jobs in August and that the unemployment rate dipped from an already-low 3.9 percent to 3.8 percent, according to data provider FactSet. That would be nearly the lowest rate in 50 years.
That level of hiring would slightly exceed the pace in July, when employers added 157,000 jobs. The expected gain for August would be a solid one, though below the average increase over the previous six months of 220,000 jobs.
The Labor Department’s August jobs report will be released at 8:30 a.m. Eastern time Friday.
The economy is expanding steadily, fueled by tax cuts, confident consumers, greater business investment in equipment and more government spending. Growth reached 4.2 percent at an annual rate in the April-June quarter, the fastest such pace in four years.
Most analysts have forecast that the economy will expand at an annual pace of at least 3 percent in the current July-September quarter. For the full year, the economy is on track to grow 3 percent for the first time since 2005.
Consumer confidence rose in August to its highest level in nearly 18 years. Most Americans feel that jobs are widely available and expect the economy to remain healthy in the coming months, according to the Conference Board’s consumer confidence survey.
The buoyant mood is lifting spending on everything from cars to restaurant meals to clothes. Consumers’ enthusiasm is even boosting such brick-and-mortar store chains as Target, Walmart and Best Buy, which have posted strong sales gains despite intensifying competition from online retailers.
In August, factories expanded at their quickest pace in 14 years, according to a survey of purchasing managers. A manufacturing index compiled by a trade group reached its highest point since 2004. Measures of new orders and production surged, and factories added jobs at a faster pace than in July.
Not all the economic news has been positive. Higher mortgage rates and years of rapid price increases are slowing the housing market. Sales of existing homes dropped in July for a fourth straight month.
And wages are still rising only modestly, even after more than nine years of economic expansion and an ultra-low unemployment rate.
Many economists also worry that President Donald Trump will soon follow through on a threat to impose tariffs of up to 25 percent on $200 billion of imports from China. That would be in addition to $50 billion in duties already imposed. That move could shave as much as a quarter-point off growth over the next year, Mark Zandi, chief economist at Moody’s Analytics, has estimated.
For now, there’s little sign that companies are worried enough about a trade war to slow hiring. Businesses are increasingly reluctant to even lay off workers, in part because it would be difficult to replace them at a time when qualified job applicants have become harder to find.
On Thursday, the government said the number of people seeking unemployment benefits — a proxy for layoffs — amounted to just 203,000 last week, the fewest total in 49 years.