Job growth cooled in July, but the report could ease investors' fears that the Fed would move quickly to hike interest rates. Fred Katayama reports.
Not too hot or cold: U.S. employment growth cooled a bit in July, but the economy managed to add 209,000 jobs. That's the sixth straight month that job growth exceeded 200,000. Although the unemployment rate unexpectedly ticked higher to 6.2 percent, that was a positive sign for the economy, since more people gained enough confidence to enter the job market. As in June, the job gains were broad-based with services accounting for most of the increase. While the job gains were shy of what Wall Street expected, it may be the goldilocks report that could please unnerved investors who sold off stocks yesterday on concerns that wages were rising. The July report showed average hourly earnings increased by just a penny. An overly strong report could have convinced investors that the Federal Reserve would have to move quicker to hike interest rates. Wells Fargo Private Bank strategist Sean Lynch said, "The worry was that bad news would be bad for the market and good news would be bad for the market, and we came right down the middle with this report, so we saw some nice movement in the futures. It still points to a job market and an economy that is improving, but we also have the absence of wage pressures building which is becoming another concern for investors."