U.S. employment rose more than expected for the second month in a row in July and wages picked up, bolstering expectations of faster economic growth and raising the probability of a Federal Reserve interest rate increase this year.
Nonfarm payrolls rose by 2,55,000 jobs after an upwardly revised 2,92,000 surge in June, with hiring broadly based across the sectors of the economy, the Labor Department said.
The unemployment rate was unchanged at 4.9 per cent as more people entered the labour market.
Highlighting job market strength, average hourly earnings increased a healthy eight cents and workers put in more hours.
In addition, 18,000 more jobs were created in May and June.
“The July jobs report was everything you could have asked for and more. Provided the strength in jobs is confirmed with other economic data, the Fed will have sufficient reason to hike (rates) this year,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch.
The dollar rallied against a basket of currencies after the data was released, while prices for U.S. government debt fell as traders ramped up bets for an eventual rate hike.
The signs of labour market strength could ease voter frustrations.
That discontent has helped fuel support for Donald Trump, who plans to lay out his economic vision on August 8. Economists polled by Reuters had forecast payrolls increasing 1,80,000 in July and the unemployment rate dipping one-tenth of a percentage point to 4.8 per cent.
