US jobs keep pace while wage pickup stays elusive

Bloomberg

The latest US jobs report showed the kind of gains that justify the Federal Reserve’s plans to keep raising interest rates and also give central bankers little urgency to pick up the pace.
Employers added workers at a steady, albeit cooler, pace in July, and the prior two months were revised higher, Labor Department figures showed.
Wages extended their steady-but-unspectacular growth, while the unemployment rate slipped back below 4 percent and near the lowest since 1969. Treasury yields and the dollar moved lower, while US stocks gained ground. A report later in the morning from the Institute for Supply Management, whose index of non-manufacturing industries was below all analyst estimates, suggested economic growth is softening this quarter after the fastest expansion since 2014.
A widening trade war risks curbing business investment, which could hurt hiring.
“There are hints that concern about a trade war may be filtering into data, but so far overwhelmingly people are shrugging it off,” said Joseph Song, senior US economist at Bank of America Corp. in New York. On the ISM report, “I’m taking this as flashing yellow. This is definitely on my radar now and I’m very interested to see what happens in August. If you get another disappointing read, I would start to put trade tensions as a bigger risk to the outlook.”
Even so, healthy consumer spending and business investment, supported by tax cuts and a bump in federal spending this year, are resulting in job gains that continue to be more than sufficient to accommodate population growth in the 10th year of the economic expansion. That’s likely to keep the Fed on track to raise interest rates in September and December as investors expect.