US non-farm payrolls rise less than expected

The data showed US employers added 215,000 jobs, missing the consensus forecast of 225,000. It also came under the monthly average gain of 246,000 over the prior 12 months. The unemployment rate was unchanged at 5.3%.

The Labor Department said the job gains in July were mainly in retail trade, health care, professional and technical services, and financial activities.

Dennis de Jong, managing director at UFX.com, said the jobs market has improved, giving the Federal Reserve reason to lift interest rates for the first time in nine years.

“Today’s figure has given (Fed Chair) Janet Yellen and her Fed colleagues the ammunition to pull the trigger on an interest rate rise next month, and they aren’t likely to hold back," he said.

“The US economy remains in a healthy state and, although there are economic threats around the world, the time is right for a first rate hike in nine years. Other economies are likely to follow suit over the next few months as we get back towards a semblance of economic normality.”

Chris Williamson, chief economist at Markit, agreed that the rebound in economic data adds to the likelihood of the Fed starting to raise rates. He said the move looks most likely in September, providing the data remains consistent with the moderate recovery in coming months.

However, he noted that earnings increases still had far to go. Weekly hourly earnings rose 2.1% year-on-year, compared to forecasts of 2.3%.

“Weak wage growth remained the fly in the ointment of the labour market report, albeit with signs that pay pressures are gradually picking up, with average hourly earnings up 2.1% on a year ago," Williamson said.

"Low inflation is also likely to keep wage reviews down in coming months, suggesting there is little scope for any imminent marked upturn in pay growth. Low pay pressures should in turn help keep inflation down, meaning the Fed should be able to follow a steady and predictable course of small gradual hikes in interest rates.”