U.S. Job Growth Misses Estimates In July, Previous Months' Numbers Revised Sharply Lower

(RTTNews) - Job growth in the U.S. fell well short of economist estimates in the month of July, according to a closely watched report released by the Labor Department on Friday.

The Labor Department said non-farm payroll employment rose by 73,000 jobs in July, while economists had expected employment to jump by 110,000 jobs.

The report also showed much larger than normal downward revisions to job growth in May and June, with employment in the two months increasing by a combined 258,000 fewer jobs than previously reported.

With the downward revisions, employment in May edged up by 19,000 jobs, while employment in June crept up by 14,000 jobs.

The Labor Department said the job growth in July came as employment continued to trend up in healthcare and social assistance, while the federal government continued to lose jobs.

The report also said the unemployment rate inched up to 4.2 percent in July from 4.1 percent in June, with the uptick matching expectations.

The modest increase by the unemployment rate came as the by the household survey measure of employment fell by 260,000 persons, while the labor force shrank by 38,000 persons.

"The cracks in the labor market have widened substantially and add further pressure on the Federal Reserve to lower interest rates and support the dissenting Fed Governors' views that the FOMC should have lowered rates this week," said Nationwide Chief Economist Kathy Bostjancic.

She added, "We maintain our view that the Fed will ease monetary policy starting in September and see a total of 75 basis points of rates cuts by year-end due to a weakening in employment and the overall economy."

The Labor Department also said average hourly employee earnings increased by 12 cents or 0.3 percent to $36.44 in July.

Average hourly employee earnings in July were up by 3.9 percent compared to the same month a year ago, reflecting a slight acceleration from 3.8 percent in June.