It has happened again. The U.S. has created more jobs than most people expected according to the July employment report. The jobs market is considered one of the most important indicators of economic health, and the latest employment figures sure offer a solidly promising (if not phenomenal) picture.
According to the latest data from the Bureau of Labor Statistics (BLS), U.S. payrolls added a solid +209,000 jobs in July. This beat estimates of +183,000 from economists surveyed by Reuters. Major contributors were food & drink services, professional & business services and healthcare. July’s payroll gains take a step forward toward filling in June’s record job openings of 6.2 million – the highest ever since the series first came out.
Labor force participation rate also saw an uptick to 62.9% in July, from the previous month’s 62.8%. And more job seekers seem to be finding work, as the unemployment rate in July inched back to 4.3% (what it was in May) – the lowest level since March 2001 (based on U.S. Bureau of Labor Statistics and Federal Reserve Economic Data). Additionally, the employment-to-population ratio increased to an eight-year high of 60.2% (as suggested by a CNBC report).
Average hourly earnings on private nonfarm payrolls increased by +0.3% in July – an improvement over June’s +0.2% hike. Over the year, they grew at +2.5% as of July, same as the previous months. Wage growth may still be lacking the ‘wow’ factor, but at least it is not stagnant all together as labor demand is strong. We are hopeful that the record job openings in June can create further upward pressure on pay to close the skills gap while hiring.
Bottom Line for Investors
The July jobs data brings home the point that U.S. employment is steadily progressing – a sign of healthy macroeconomic fundamentals and growth potential for companies. That sure augurs well for the market bull. But, when it comes to investing, an in-depth analysis of sectors and strategies deserves close attention.
That’s because, given the current economic situation that is reflected in the recent employment numbers and other fundamentals, investors tend to become too complacent for their own good. Of course, the healthy fundamentals spell opportunities, but selecting the ones right for your financial goals (versus randomly buying into the momentum) is crucial in building a strong nest egg. At Zacks Investment Management, we provide customized analysis for every client, then use our independent market research and tools we’ve developed to design customized investment portfolios based on each individual’s needs. If you need help understanding if your current portfolio is effectively positioned to utilize the present economic conditions and market opportunities, call us at 1-888-600-2783.
In addition, you can check out our latest Market Strategy Report, which discloses insights into the current stage of economic expansion and has tips on which sectors to focus on and how to effectively invest in this cycle. To get your free copy, click on the link below:
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