U.S. adds a robust 255,000 jobs; unemployment stays at 4.9%

Washington — Years of steady job gains have finally begun to benefit a wider range of Americans, including those with less education and in lower-paying jobs.

A second straight month of robust hiring — 255,000 jobs added in July — pointed to employer confidence that suggested that the economy is powering through a slump that struck early this year. The unemployment rate remained at 4.9%, the Labor Department said Friday.

Hiring has been solid for six years, but for most of that time there were caveats: Average hourly pay was stagnant. And millions were no longer either working or looking for work, leaving a smaller proportion of adults in the labor force.

Evidence is emerging that that those long-running gauges are finally improving. Many businesses are offering higher pay to attract workers as competition to fill jobs heats up. Average pay is up 2.6% from a year ago — matching the best 12-month gain since the Great Recession ended in 2009 and comfortably above inflation of just 1%.

The resilient job market is encouraging more Americans to begin looking for a job — a key trend that helps offset a drag from the growing retirements of aging baby boomers. Their influx has halted a long-term decline in the proportion of Americans who are either working or looking for work.

Taken together, the two trends suggest the recovery, now seven years old, is finally benefiting a broad spectrum of the population.

Economists at Goldman Sachs have found that pay for workers earning less than $12.50 an hour has risen 4% in the past year, more than any other income group. Those earning from $12.50 to $20 an hour have received the next-biggest increase, at just above 3%.

“Wage growth figures indicate that the tide is turning,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office and president of the conservative American Action Forum.

One exception, though, may be manufacturing, a central sector of Wisconsin's economy.

Manufacturing continues to struggle somewhat and is weighing on hiring. Factories received fewer orders in June for a third straight month. Weak growth overseas and a stronger dollar have cut into many companies’ overseas businesses. And auto sales may have leveled off, according to data released this week.

The slowdown in manufacturing has cost jobs: Factory employment has fallen about 30,000 in the past year, depriving the economy of key middle-income positions.

Still, investors seemed pleased by Friday’s job figures, which raised hopes for the broader economy without seeming to compel the Federal Reserve to resume raising interest rates soon. The S&P and Nasdaq indexes each closed at record highs on Friday.

The jobs report also suggested that employers were unfazed by either Britain’s late-June vote to quit the European Union or the U.S. economy’s weak growth in the first half of the year: Just 1% at an annual rate. Most analysts expect the solid hiring to help fuel an economic rebound in the second half of this year.

The economy’s average annual growth rate since the recession ended in June 2009 is just over 2%, the slowest since the 1930s. But job growth — the backbone of the economy — has fared much better: 2014 and 2015 notched the fastest two-year hiring gains since the late 1990s.

Part of the disparity is explained by slow growth in worker efficiency since the recession ended. Stronger hiring amid a weak expansion suggests that the economy has grown less productive, with workers delivering less output per hour.

Many of the disparities that have fueled voter anger this election season remain. Just 54% of Americans with only high school degrees have jobs, compared with 72%  of those with college or postgraduate degrees.

Women have been receiving a solid majority of the new jobs this year. Through July, 78% of the 1.3 million jobs added have gone to women.

Americans with less than a high school degree are also coming back into the job market, likely in response to rising wages in lower-skilled sectors. Forty-four percent of people without high school degrees have jobs — the highest proportion since July 2007, before the recession began.

“It certainly is encouraging,” said Diane Swonk, founder of DSEconomics. “But is it enough to derail the anger we’re seeing this election season? No.”