The employment report shows that hiring remains strong as trade wars threaten the economy

Wages resumed and hiring continued to rise in July, albeit at a much slower pace than last year, reflecting the fact that the economy is moving towards full employment but that workers are seeking to integrate the work market.

The economy added 164,000 non-farm jobs in July, as expected, but revisions cut job growth by 41,000 in May and June. This brought the three-month average to 140,000 jobs created, well over 200,000 jobs last fall. Wages increased 0.3% in July or 3.2% from one year to the next, and June wage growth was revised upwards to the same level.

"We are pretty satisfied," said Art Hogan, chief market strategist at National Securities. "The trend is steady as it goes, it's been a little faster, and in terms of participation it's going well, and I certainly think we're in a place where we need good news." We have enough bad news as far as is going to be a drag in terms of escalating commercial concerns ".

The jobs report, which is generally important, was released on Friday morning and the markets followed suit well, as stocks remained under pressure from the latest commercial developments. Economists say the latest pricing threats increase the potential for an economic slowdown, or even a recession, if companies become even more cautious, postpone new spending and ultimately slow down hiring because of it.

The escalation of President Donald Trump's trade wars on Thursday, with a new threat of tariffs on $ 300 billion worth of Chinese goods, diverted the Fed's market interest rate cut Wednesday and from the apparently hawkish commentary by Fed Chairman Jerome Powell. The market ignores Powell's lack of commitment to continue its hikes and now expects a rate cut in September to protect the economy from the consequences of tariffs.

Economists have said that the jobs report is expected to have little impact on the Fed, which will not meet until September, after the release of the jobs report in August.

"The Fed can be certain that it has just cut rates, but unfortunately it will have to reduce them again because of the headwinds we face," said Diane Swonk, chief economist for Grant Thornton.

The employment report was viewed as mostly positive, with a resumption of labor force participation to 63%, its highest level since March, and a total labor force of 163.4%. million, which is a record.

The report is also important in that the labor market provides a significant fuel for consumer spending, about two-thirds of the US economy. This so far has remained strong while business investment has been more cautious because of tariffs and trade frictions. The new Trump tariffs would affect for the first time many consumer products.

Total non-farm payroll in May was revised to 62,000 and job creation in June was reduced from 31,000 to 193,000. The number of hirings in the health care sector in July increased by 30 000, while professional and technical services added 31,000. Computer systems design and related services increased by 11,000 jobs and generated about one-third of employment gains in professional and technical services in July and August. during the year. .

Manufacturing jobs grew at a better than expected pace of 16,000 in an industry that was affected by trade disputes. Hours worked in the sector, however, fell three tenths to 40.4, the lowest level since July 2011.

"We are still introducing workers into the labor market, so this suggests that we are finally exploiting some of the looseness we had neglected before," said Swonk, pointing out that teens had contributed to the growth of the labor force. ;artwork. "It's a good news … Teenagers finally arrive after a long break."

Swonk, however, said gains in the manufacturing sector were mostly for the entire auto sector and that losses could occur next month with mill closures in Ohio and Michigan.

Consumer confidence data, also released on Friday, showed a slight improvement over June. The July sentiment was in line with the reading of 98.4 reported earlier in the month, although it is slightly below expectations.

Dr. Richard Curtin, head of the survey for the University of Michigan, pointed out that survey consumers were the most optimistic since 2003 and did not meet expectations regarding their financial situation.

"The job market is good, they are satisfied with the earnings gains and the household net worth also continues to increase.It is not that they expect them to Factors continue to accelerate, but rather than they expect to continue moderate growth in income and jobs.Consumers do not expect much change in the unemployment rate at next year ", according to Curtin.