U.S. employers hired more workers than expected in July and raised their wages, signs of labor market tightness that likely clears the way for the Federal Reserve to announce next month a plan to start shrinking its massive bond portfolio.
The Labor Department said that nonfarm payrolls increased by 209,000 jobs last month amid broad gains. June’s employment gain was revised up to 231,000 from the previously reported 222,000.
Average hourly earnings increased nine cents, or 0.3 percent, in July after rising 0.2 percent in June. That was the biggest increase in five months. Wages increased 2.5 percent in the 12 months to July, matching June’s gain.
Average hourly earnings have been trending lower since surging 2.8 percent in February. Lack of strong wage growth is surprising given that the economy is near full employment, but July’s monthly increase in earnings could offer some assurance to Fed officials that inflation