AUGUST 6, 2018 – 157,000 NEW JOBS CREATED
Jobs growth backed off a bit in July with 157,000 new jobs added to the economy; overall jobs situation remains solid. Even though the number missed expectations for 190,000, numbers for May and June were revised upwards, resulting in a strong 224,000 jobs per month during the last 90 days.
The unemployment rate for July fell by one-tenth of a percent to 3.9 percent, which hovers around the lowest level seen in nearly 50 years. Average hourly earnings also met expectations, increasing 2.7 percent over the same period a year ago. The Federal Reserve is closely watching the wages component as it seeks to meet its 2 percent inflation target,
A September rate increase is, effectively, a done deal. Unemployment is low and the GDP growth of 4 percent in Q2 was notable. A decision about a fourth hike in 2018 will not need to be made until more data comes in for the second half of the year. Expectations are for a slow down based on the fall-out from trade wars and the midterm elections. Take time to assess your future interest obligations and look at the attractive rates currently available on interest rate swaps to hedge against the upcoming rate increases.