New Jobs and Trade Gap Both Ticked Down Over Summer

A construction worker walks atop a building as a crane lifts a load over head in Miami on July 2, 2019. (AP Photo/Brynn Anderson, File)

(CN) – Hiring slowed in July but was still strong as employers added 164,000 new jobs, while the closely watched trade deficit with China narrowed slightly.

The number of new positions added last month is considered solid but falls below the revised 193,000 jobs added in June.

Unemployment remained at 3.7%, a nearly 50-year low, for the second straight month, according to a Labor Department report released Friday. Average hourly earnings were up 3.2% from a year ago, compared to the 3% annual gain from the month before.

The Commerce Department also reported Friday that the overall trade deficit – the difference between the number of goods and services the United States sells and buys from other countries – fell to $55.2 billion in June, down 0.3% from the month before.

The goods deficit with China dropped 0.8% to $30 billion. Chinese imports to the U.S. were down 0.7% in June while American exports to China were little changed.

On Thursday, President Donald Trump stepped up his more than year-long trade war with China by announcing his administration will impose a new 10% tariff on $300 billion worth of Chinese goods beginning in September.

The Trump administration had already levied 25% tariffs on $250 billion in Chinese products. Beijing pushed back with tariffs on $110 million worth of U.S. goods. The president has made closing the trade gap with China in particular a top priority in his “America First” agenda, saying the deficit is the result of bad deals by past administrations.

In light of trade wars, lagging inflation and global growth fears, the Federal Reserve lowered interest rates this week for the first time since the start of the recession more than a decade ago. The benchmark short-term rate, which influences consumer and business loans from mortgages to credit cards and home equity lines of credit, is now between 2% and 2.25%.

The U.S. economy marked 10 consecutive years of expansion last month, the longest streak on record. And while the economy is still expanding, that growth has slowed so far this year.

The Commerce Department said last week that the growth in the gross domestic product, a primary indicator of economic health, dropped to 2.1% in the second quarter, down from 3.1% in the first.

Economists expect yearly growth of about 2.5% in 2019, a decrease from 2.9% last year.

The weaker jobs numbers in July also point to an apparent slowdown, although the Fed’s rate cut could boost overall economic growth.

The health care field posted 30,400 new jobs last month while manufacturers added 16,000 positions. Government jobs grew by 16,000 as the finance and insurance sector gained 13,900 positions and restaurants and bars added 15,400.

The retail industry lost 3,600 jobs, and construction gained just 4,000. Gains in the transportation and warehouse sector were even weaker with just 300 new positions.

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