US July non-farm payrolls rise by lower-than-expected 187,000

The US economy added fewer new jobs than expected last month, with official data showing non-farm payroll rose by 187,000 in July, below forecasts of an increase of 200,000.

The figure for June was also revised lower to 185,000 from 209,000, while May’s number was reduced by 25,000 to 281,000, meaning fewer jobs were created in the spring than first thought, according to data from the US Bureau of Labor Statistics.

It also reported that the unemployment rate fell to 3.5%, down from 3.6% in June.

Average hourly earnings were up 0.4%, or 14 cents, higher than the 0.3% expected to $33.74, but this was offset by a slight fall in the number of hours available.

The dollar weakened after the news, pushing the pound up by half a cent to $1.277.

"The July jobs report is just one datapoint before the September FOMC meeting, but we think it offers enough evidence of cooling labour market conditions to weigh in favour of no additional rate hikes. However, an upside surprise in any of the forthcoming data on the labour market and inflation would put another rate hike back on the table," said Nancy Vanden Houten, lead US economist at Oxford Economics.

"Wage growth continues to be too strong for the Fed although other measures less subject to the composition of earnings are pointing to wage pressures easing, if only gradually."

Reporting by Frank Prenesti for Sharecast.com