US job growth picks up, unemployment rate drops

WASHINGTON (Reuters) – US job growth is expected to pick up in August as the unemployment rate is at its lowest level in 18 years (3.8%), which would bolster US employment growth. the economy China.

According to a Reuters survey of economists, the non-farm wage bill probably rose by 191,000 jobs last month, after gaining 157,000 in July. The Labor Department will release its closely monitored employment report on Friday at 8:30 am EDT (12:30 GMT).

According to analysts, the $ 1.5 trillion tax package and rising public spending protected the economy from trade tensions, which also prompted Washington to impose preferential tariffs on other trading partners, including the European Union, Canada and Mexico.

They also noted that the import duties implemented so far have only affected a small part of the US economy, but they warned that this could change if President Donald Trump imposed additional tariffs on Chinese imports.

"The economy is booming," said Ryan Sweet, senior economist at Moody's Analytics in Westchester, Pennsylvania. "Given the importance of the economic recovery measures the economy enjoys, it will take a long time to achieve this."

The United States and China have imposed retaliatory duties on $ 100 billion of combined products since early July.

The Americans had until Thursday to comment on a $ 200 billion list of Chinese goods whose tariffs are expected to be reached soon. At the beginning of the year, the government imposed import duties on goods, including steel, aluminum, washing machines, lumber and solar panels, to protect industries. what Trump says is unfair foreign competition.

The international outplacement company Challenger, Gray & Christmas said on Thursday that there were 521 tariff-related job cuts in August, but these were largely offset by the hiring of 359 workers by local producers. 'steel.

Job growth in August may however be below expectations due to a seasonal shift. In recent years, the initial enumeration in August has tended to show a weak bias, with revisions subsequently showing some strength.

"This weakness of August has also tended to occur in many sectors, including manufacturing, professional services, retail and information, and we estimate that the residual seasonality could weigh on the growth of tomorrow's payroll Spencer Hill, an economist at Goldman Sachs in New York.

The unemployment rate in the United States is close to the lowest in 18 years: reut.rs/2oLzTQb

MODERATE SALARY GROWTH

Nevertheless, the anticipated decline in the tenth of a percentage point of the unemployment rate from July's 3.9% is expected to highlight the tightening of labor market conditions and reinforce expectations of a third interest rate this year when decision-makers will meet on 25 September. 26.

"Another encouraging performance in the labor market should further encourage us to believe that gradual increases in interest rates remain the best way to act in the foreseeable future," said Sam Bullard, an economist at Wells Fargo Securities in Charlotte, in North Carolina.

The employment report would add to the surveys of manufacturing and services industries by suggesting that the protectionist trade policy of the Trump administration was having a marginal impact on the economy at the moment. The economy grew at an annualized rate of 4.2% in the second quarter, almost double the pace of 2.2% between January and March.

For now, the dynamic labor market does not generate salary inflation, which probably reduces the prospects of overheating the economy. Average hourly earnings are expected to rise 0.2% in August after rising 0.3% in July.

This would maintain annual wage growth at 2.7% in August. Annual wage growth has remained below 3% since mid-2009. Moderate wage gains have been attributed to weak productivity growth and are also seen as a sign of weak labor market conditions.

"We expect, however, that it will reach a new high of 2.9% in the fourth quarter," said Lou Crandall, chief economist of Wrightson ICAP in Jersey City.

Job gains in August were likely in all sectors. Manufacturing payrolls are expected to increase by 24,000, after increasing by 37,000 in July. Construction companies probably added to the 19,000 workers hired in July.

Employment in sporting goods, hobby, book and music stores should have rebounded in August, after losing 31,800 jobs in July due to the closure of all Toys-R-Us stores. Government employment probably increased by 1,000 jobs in August.

American manufacturing jobs: reut.rs/2wPI96a