News Column

Jobs boosted as American economy lifts

August 2, 2014

By Hugo Duncan, Daily Mail, London



Aug. 02--More than 200,000 jobs were created in the United States last month as American firms took on new staff.

The so-called 'non-farm payrolls' report a key indicator of health in the world's largest economy showed employment rose by 209,000 in July. It was the sixth consecutive month that more than 200,000 jobs have been created the first time this has happened since 1997.

However, the rise in employment was smaller than expected and the unemployment rate edged up from 6.1pc to 6.2pc as more Americans started looking for work but did not find jobs.

'It is a sign of how far the US economy has come in recent months that the 209,000 increase in non-farm payroll employment in July will probably be viewed as a disappointment in the markets,' said Paul Ashworth, chief US economist at Capital Economics.

Analysts said the weaker-than-expected figures will give the US Federal Reserve room to leave interest rates at close to zero well into next year. The Fed this week trimmed its monthly bond-buying programme by another $10bn to $25bn and is on course to bring it to an end in October paving the way for interest rate hikes. Mohamed El-Erian, chief economic advisor at Allianz, said the jobs figures represented 'a goldilocks report for an economy that is steadily expanding but not lifting off'.

A separate report showed the US manufacturing sector grew at its fastest pace in more than three years in July further underlining the strength of the recovery after figures this week showed gross domestic product rose at an annual rate of 4pc in the second quarter.

The Institute for Supply Management's index of activity where 50 is the cut off between growth and decline rose from 55.3 to 57.1 last month. The equivalent index for the UK fell from 57.2 to 55.4, the lowest for a year, in a sign some of the heat is coming out of the British economy.

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Source: Daily Mail (London, England)


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