What to watch: US government’s July jobs report
CHRISTOPHER RUGABER | 8/14/2017, 12:04 a.m.
But if healthy hiring persists, it suggests employers are still finding plenty of workers.
Why is that a problem for the Fed? Because Fed policymakers have raised short-term interest rates three times in the past seven months, based on the idea that employers will soon have to pay more to attract workers. Higher wages can force companies to raise prices, which can lead to inflation.
The Fed has raised rates to forestall inflation. But if employers are still hiring at a strong pace, that suggests employers have plenty of workers to choose from and won’t have to raise pay. Some economists argue the Fed should keep rates low so this trend can continue and more people can come off the sidelines and find work.
What’s the state of manufacturing jobs?
Manufacturing output is growing modestly, but factory job growth has stalled in the past couple of months. That could undercut President Donald Trump’s efforts to return manufacturing jobs to the United States.
Factories added jobs at a robust pace over the winter, including 22,000 in February, the most in a year. But they cut 2,000 in May and added just 1,000 in June. One culprit is automakers. Car sales have declined this year after reaching a record high in 2016, and many carmakers have been forced to lay off workers.