The Jim Bakker Show

U.S. job growth cools as labor market nears full employment; wages rise

Job seekers line up to apply during "Amazon Jobs Day," a job fair being held at 10 fulfillment centers across the United States aimed at filling more than 50,000 jobs, at the Amazon.com Fulfillment Center in Fall River, Massachusetts, U.S., August 2, 2017.

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth slowed more than expected in December amid a decline in retail employment, but a pick-up in monthly wage gains pointed to labor market strength that could pave the way for the Federal Reserve to increase interest rates in March.

Nonfarm payrolls increased by 148,000 jobs last month after surging by 252,000 in November, the Labor Department said on Friday. Retail payrolls decreased by 20,300 in December, the largest drop since March, despite reports of a strong holiday shopping season.

The unemployment rate was unchanged at a 17-year low of 4.1 percent. Economists polled by Reuters had forecast payrolls rising by 190,000 in December. The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

“We do not think that today’s employment report will keep the Federal Reserve from tightening again at the March policy meeting, given other strong recent economic data,” said David Berson, chief economist at Nationwide in Columbus, Ohio.

Job growth surged in October and November after being held back in September by back-to-back hurricanes, which destroyed infrastructure and homes and temporarily dislocated some workers in Texas and Florida.

Taking some sting out of the moderation in job gains, average hourly earnings rose 9 cents, or 0.3 percent, in December after a 0.1 percent gain in the prior month. That lifted the annual increase in wages to 2.5 percent from 2.4 percent in November.

Prices of U.S. Treasuries were mostly flat while the U.S. dollar <.DXY> was slightly stronger against a basket of currencies. U.S. stock indexes opened at fresh record highs.

Employment gains in December were below the monthly average of 204,000 over the past three months. Job growth is slowing as the labor market nears full employment, but could get a temporary boost from a $1.5 trillion package of tax cuts passed by the Republican-controlled U.S. Congress and signed into law by President Donald Trump last month.

The lift from the fiscal stimulus, which includes a sharp reduction in the corporate income tax rate to 21 percent from 35 percent, is likely to be modest as the stimulus is occurring with the economy operating almost at capacity. There are also concerns the economy could overheat.

“With the tax cuts we get solid GDP growth in the near-term and then a fiscal hangover, which will likely put the economy at a greater risk of recession,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania.

NEAR FULL EMPLOYMENT

Data ranging from housing to manufacturing and consumer spending have suggested solid economic growth in the fourth quarter, despite a widening of the trade deficit in both October and November, which could subtract from gross domestic product.

In a separate report on Friday, the Commerce Department said the trade gap widened 3.2 percent in November to $50.5 billion, the highest level since January 2012.

The deficit was boosted by record high imports, which offset the highest exports in three years. The economy grew at a 3.2 percent annualized rate in the third quarter.

For all of 2017, the economy created 2.1 million jobs, below the 2.2 million added in 2016. Economists expect job growth to slow further this year as the labor market hits full employment, which will likely boost wage growth as employers compete for workers.

Economists are optimistic that annual wage growth will top 3.0 percent by the end of this year. The December employment report incorporated annual revisions to the seasonally adjusted household survey data going back five years.

There was no change in the unemployment rate, which declined by seven-tenths of a percentage point last year.

Economists believe the jobless rate could drop to 3.5 percent by the end of this year. That could potentially unleash a faster pace of wage growth and translate into a much stronger increase in inflation than currently anticipated.

That, according to economists, would force the Fed to push through four interest rate increases this year instead of the three it has penciled in. The U.S. central bank raised borrowing costs three times in 2017.

“If the unemployment rate declines and wages rise faster, which is likely, the Fed is going to start worrying about wage inflation,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

Employment gains were largely broad-based in December. Construction payrolls increased by 30,000 jobs, the most since February, reflecting recent strong increases in homebuilding. Manufacturing employment increased by 25,000 jobs.

Manufacturing is being supported by a strengthening global economy and a weakening dollar. Employment in the utilities sector fell for a second straight month.

General merchandise stores payrolls tumbled by 27,300 in December, with employment at clothing stores dropping by 3,800 jobs.

For all of 2017, retail employment dropped by 67,000 jobs after rising by 203,000 in 2016. Further job losses are likely this year as major retailers, facing stiff competition from online sellers like Amazon.com Inc <AMZN.O>, close stores.

Sears Holdings Corp said on Thursday it was shuttering 103 unprofitable Kmart and Sears stores. Macys Inc also announced 11 store closures, which could leave 5,000 workers unemployed.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Wall Street kicks off 2018 on a strong note

The trading floor is seen on the final day of trading for the year at the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., December 29, 2017

By Sruthi Shankar

(Reuters) – Wall Street’s main indexes were higher on Tuesday, the first trading day of the year, buoyed by gains in technology and consumer discretionary stocks.

Major stock indexes closed out 2017 with their best performance since 2013, powered by a combination of strong economic growth, solid corporate earnings, low interest rates and hopes of corporate tax cuts.

“The first week of trading usually suggests the overall trend of the markets which we expect to be positive,” Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note.

Oil prices hovered near their mid-2015 highs on Tuesday amid large anti-government rallies in major exporter Iran and ongoing supply cuts led by OPEC and Russia.

Gold and copper prices continued their upward march, but the greenback began the year on the back foot, with the dollar index slipping to its weakest level since September.

“While we don’t expect the Iranian unrest to reach a full blown political situation just yet, the protest will add to an already positive uptrend in oil and gold prices,” Cardillo said.

December payrolls report, data on manufacturing and service sectors are among leading indicators expected during the week, and will be scrutinized for signs of improving economic health and the number of interest rate hikes this year.

Minutes from the Federal Reserve’s December meeting, when the central bank raised rates for the fourth time since the 2008 financial crisis, will be issued on Wednesday.

At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was up 112.06 points, or 0.45 percent, at 24,831.28 and the S&P 500 was up 9.49 points, or 0.35 percent, at 2,683.1. The Nasdaq Composite was up 21.51 points, or 0.31 percent, at 6,924.90.

Six of the 11 major S&P sectors were higher, led by gains in technology and consumer discretionary stocks.

Shares of Walt Disney rose 1.6 percent, giving the biggest boost to the Dow, after brokerage Macquire upgraded the company’s stock to “outperform”.

Netflix and Discovery Communications also rose on positive recommendations from Macquire.

Shares of casino operators Wynn resorts, Las Vegas Sands and Melco Resorts Entertainment were down after a report showed lower-than-expected rise in Macau gambling revenue in December.

Abbott Labs jumped 2.6 percent after JPMorgan and Morgan Stanley upgraded the healthcare company’s stock to “overweight”.

Advancing issues outnumbered decliners on the NYSE by 1,938 to 652. On the Nasdaq, 1,678 issues rose and 743 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

Dollar drops on disappointing U.S. inflation data

By Karen Brettell

NEW YORK (Reuters) – The U.S. dollar weakened on Wednesday after consumer price data showed sluggish inflation, adding to concerns the Federal Reserve will be less able to execute multiple rate increases next year.

Excluding the volatile food and energy components, consumer prices ticked up 0.1 percent in November, with the annual increase in the core CPI slowing to 1.7 percent in November from 1.8 percent in October.

“The focus is on the core measure of inflation, that came in weaker than the market expected,” said Vassili Serebriakov, a foreign exchange strategist at Credit Agricole in New York.

The dollar index against a basket of six major currencies <.DXY> dropped to 93.888, down 0.23 percent on the day.

The weak data comes before a widely expected rate hike on Wednesday, when the U.S. central bank concludes its two-day meeting.

“It will probably reinforce the caution of the committee members that are concerned that the Fed is falling short of its inflation target,” Serebriakov said. “It also supports our view that the Fed will be fairly gradual next year.”

The Fed will announce its decision on rates at 1900 GMT on Wednesday followed by a statement. Chair Janet Yellen will hold a news conference at 1930 GMT.

The Fed on Wednesday may also give its strongest hint yet on how the Trump administration’s tax overhaul could affect the U.S. economy.

Investors will pay close attention to how the central bank aims to balance a stimulus-fueled economic boost with the ongoing weak inflation and tepid wage growth that has curbed some policymakers’ appetite for higher rates.

President Donald Trump’s legislative agenda may be harder to push through, however, following Tuesday’s victory by Democrat Doug Jones in the bitter fight for a U.S. Senate seat in deeply conservative Alabama.

(Additional reporting by Saikat Chatterjee in London; Editing by Nick Zieminski)

Fed interest rate hike expected next week, three hikes expected in 2018/poll

The Federal Reserve headquarters in Washington September 16 2015. REUTERS/Kevin Lamarque/File Photo

By Shrutee Sarkar

BENGALURU (Reuters) – The U.S. Federal Reserve is almost certain to raise interest rates later this month, according to a Reuters poll of economists, a majority of whom now expect three more rate rises next year compared with two when surveyed just weeks ago.

The results, from a survey taken just before the U.S. Senate voted to pass tax cuts that are expected to add about $1.4 trillion to the national debt over the next decade, show economists were already becoming more convinced that rates will need to go even higher.

While about 80 percent of economists surveyed in October said such tax cuts were not necessary, the passage of the bill, President Donald Trump’s first major legislative success, means the forecast risks have shifted toward higher rates, and faster.

The poll’s newly raised expectations for three rate rises next year are now in line with the Fed’s own projections. But they come despite a split among U.S. policymakers on the outlook for inflation, which has remained persistently low.

That is a similar challenge faced by other major central banks, who are generally turning away from easy monetary policy put in place since the financial crisis, looking through still-weak wage inflation and overall price pressures for now.

The core personal consumption expenditures price index (PCE), which excludes food and energy and is the Fed’s preferred inflation measure, has undershot the central bank’s 2 percent target for nearly 5-1/2 years.

The latest Reuters poll results suggest it is expected to average below 2 percent until 2019.

While the U.S. economy expanded in the third quarter at a 3.3 percent annualized rate, its fastest pace in three years, the latest Reuters poll – taken mostly before the release of that data – suggested that may be the best growth rate at least until the second half of 2019.

The most optimistic growth forecast at any point over the next year or so was 3.7 percent, well below the post-financial crisis peak of 5.6 percent in the fourth quarter of 2009.

Still, all the 103 economists polled, including 19 large banks that deal directly with the Fed, said the federal funds rate will go up again in December by 25 basis points, to 1.25-1.50 percent.

“This is about just getting back to a neutral level where monetary policy is neither encouraging growth or pushing against growth,” said Brett Ryan, senior U.S. economist at Deutsche Bank, which recently shifted its view to four rate rises next year.

“The Fed is still accommodative at the moment and we are still some ways away from the neutral fed funds rate which would in the Fed’s view be closer to 2.75 percent. The Fed can hike without slowing the economy.”

Financial markets are also pricing in over a 90 percent chance of a 25 basis-point hike in December, largely based on the falling unemployment rate and reasonably strong economic growth this year.

Asked what is the primary driver behind the Fed’s wish to raise rates further, over 40 percent of respondents said it was to tap down future inflation.

However, almost a third of economists said it is to gather enough ammunition to combat the next recession.

“At some point we are going to have a downturn and they (the Fed) are going to need to react and it is harder to do that when rates are closer to zero,” said Sam Bullard, an economist at Wells Fargo.

The remaining roughly 30 percent had varied responses, including some who said higher rates were needed to avoid risks to financial stability.

Over 90 percent of the 66 economists who answered another question said that the coming changes at the Fed – a new Fed Chair along with several new Fed Board members – will also not alter the current expected course of rate hikes.

“Both the rate tightening outlook and balance sheet reduction program will remain in place as the Fed officials fill open seats. Easing of financial regulation is likely the area that has the most forthcoming changes,” Bullard said.

(Additional reporting and polling by Khushboo Mittal and Mumal Rathore; Editing by Ross Finley and Hugh Lawson)

Dudley sees Fed rate hikes; inflation weakness ‘fading’

William Dudley, President of the New York Federal Reserve Bank, answers a question, after addressing the Indian businessmen at the Bombay Stock Exchange (BSE) in Mumbai, India May 11, 2017.

By Jonathan Spicer

SYRACUSE, N.Y. (Reuters) – The Federal Reserve is on track to gradually raise interest rates given the recent inflation weakness is fading and the U.S. economy’s fundamentals are sound, an influential Fed policymaker said on Monday, reinforcing the central bank’s confident tone.

New York Fed President William Dudley, among the first U.S. central bankers to speak publicly since a decision last week to hold rates steady for now, cited the soft dollar and strong overseas growth among the reasons he expects slightly above-average U.S. economic activity and a long-sought rise in wages.

“With a firmer import price trend and the fading of effects from a number of temporary, idiosyncratic factors, I expect inflation will rise and stabilize around the (Fed’s) 2 percent objective over the medium term,” he told students and professors at Onondaga Community College.

“In response, the Federal Reserve will likely continue to remove monetary policy accommodation gradually,” added Dudley, a close ally of Fed Chair Janet Yellen and a permanent voter on monetary policy.

Dudley’s comments were similar to his speech earlier this month, and reinforced the growing expectation that the Fed is set to raise rates for a third time this year in December. That notion was driven home by Fed forecasts published last week, when the central bank held rates but announced the beginning of a long process of shedding bonds it accumulated to boost the economy.

Still, others at the Fed are less anxious to tighten policy in the face of price readings that have sagged since February, despite strong jobs growth. Futures traders give a December rate hike about a 55-percent probability, according to Reuters data.

Dudley nodded to the three devastating hurricanes that have struck parts of the U.S. south and the Caribbean, noting their effects will likely make it more difficult to interpret economic data in coming months. He said, though, that the effects would likely be short-lived and noted that such events tend to boost economic activity as rebuilding gets underway.

In a speech focused on workforce development, he said the Fed, which is tasked with achieving maximum sustainable employment, “cannot declare success if we have people who want to work but lack the skills to fill available jobs.” Yet he noted that the Fed’s tool kit is limited and best works to provide incentives for firms to invest and grow.

“There are greater incentives for businesses to invest in labor-saving technologies” and the labor market improves, he said. “Investment spending should also benefit from a better international outlook and improvement in U.S. trade competitiveness caused by the dollar’s recent weakness.”

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)

Dollar hits low note while euro shines; storms stoke worry in U.S.

By Hilary Russ

NEW YORK (Reuters) – Reduced expectations for another U.S. Federal Reserve interest rate hike this year helped drive down the dollar to its lowest in more than 2-1/2 years on Friday and kept gold near a one-year high.

The euro hit multi-year peaks in the wake of a European Central Bank meeting, while U.S. crude oil prices tanked more than 3 percent as powerful Hurricane Irma roared toward Florida.

Stubbornly weak inflation continues to surprise Fed policymakers. In a speech on Thursday, New York Fed President William Dudley did not repeat an assertion from three weeks ago that he expects to raise rates once more this year.

Also dampening the dollar and lowering the chances of another rate hike was an agreement in Congress to push U.S. debt ceiling talks three months down the road to December, coinciding with the Fed’s policy meeting.

Against a basket of other major currencies, the dollar index <.DXY> was down 0.38 percent after touching a low of 91.011, its weakest since January 2015.

The safe-haven Japanese yen <JPY=> also strengthened 0.61 percent versus the greenback at 107.80 per dollar, and the euro <EUR=> rose 0.12 percent to $1.2036.

The euro’s rally built on ECB President Mario Draghi’s suggestion that it may begin tapering its massive stimulus program this fall.

Draghi referred several times Thursday to the euro’s strength and said it was the main reason for a cut in the bank’s 2018-19 inflation forecasts. He also indicated any winding down of its massive stimulus program was likely to be slow.

Those comments did little to deter euro bulls, however, and a Reuters report that central bank officials were in broad agreement that their next step would be to reduce their bond purchases also supported the currency.

The ECB “left the mystery out there” with regard to tapering, said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. “It creates a feeding frenzy, and the momentum that was there (in the euro) gets accelerated.”

Oil prices fell sharply on worries that energy demand would be hit by Irma, one of the most powerful storms to near the United States in a century, as it barreled toward Florida and the U.S. Southeast.

Irma is the second major storm to threaten the United States in two weeks after Hurricane Harvey shut a quarter of U.S. refining capacity and 8 percent of U.S. oil production.

“Hurricanes can have a lasting effect on refinery and industry demand,” said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

U.S. crude <CLcv1> fell 3.12 percent to $47.56 per barrel and Brent <LCOcv1> was last at $53.76, down 1.34 percent.

Economists have said Harvey could weigh on U.S. economic growth in the third quarter.

Spot gold <XAU=> was down 0.2 percent to $1,346.52 an ounceafter hitting $1,357.54, its highest since August 2016. It was up 1.7 percent this week, notching a third consecutive weekly gain.

U.S. shares were mixed, with the S&P ending slightly lower as investors braced for Irma and fretted that Pyongyang could launch another missile test on Saturday, North Korea’s founding day, keeping risk appetite in check going into the weekend.

The Dow Jones Industrial Average <.DJI> rose 13.01 points, or 0.06 percent, to end at 21,797.79, the S&P 500 <.SPX> lost 3.67 points, or 0.15 percent, to 2,461.43 and the Nasdaq Composite <.IXIC> dropped 37.68 points, or 0.59 percent, to 6,360.19.

Stocks elsewhere were slightly higher.

The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.17 percent and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> edged up 0.01 percent.

The U.S. 10-year Treasury yield fell to a 10-month low of 2.016 percent but then rose, with the benchmark notes last up 2/32 in price to yield 2.0559 percent.

(Additional reporting by Sam Forgione, Gertrude Chavez-Dreyfuss, Julia Simon and Lewis Krauskopf and Caroline Valetkevitch in New York; Editing by Nick Zieminski and James Dalgleish)

U.S. jobless claims drop to near six-month low

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits fell to near a six-month low last week, pointing to a further tightening in the labor market that could encourage the Federal Reserve to lay out a plan to start unwinding its massive bond portfolio.

Labor market strength was corroborated by other data on Thursday showing manufacturers in the mid-Atlantic region sharply increased hours for workers in August amid a jump in new orders and unfilled orders.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 232,000 for the week ended Aug. 12, the Labor Department said.

That was the lowest level since the week ended Feb. 25 when claims fell to 227,000, which was the best reading since March 1973. Data for the prior week was unrevised.

It was the 128th week that claims remained below 300,000, a threshold associated with a robust labor market. That is the longest such stretch since 1970, when the labor market was smaller. The unemployment rate is 4.3 percent.

Economists polled by Reuters had forecast claims dropping to 240,000 in the latest week. A Labor Department official said there were no special factors influencing the claims data and that no states had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 500 to 240,500 last week.

Prices of U.S. Treasuries were trading lower as were U.S. stock index futures. The dollar <.DXY> was stronger against a basket of currencies.

LABOR MARKET STRENGTH Last week’s claims data covered the survey week for the August nonfarm payrolls. The four-week average of claims fell 3,500 between the July and August survey periods, suggesting another month of solid job growth.

Payrolls increased by 209,000 jobs in July. The economy has added 1.29 million jobs this year and the unemployment rate has fallen five-tenths of a percentage point.

Labor market tightness has, however, failed to generate strong wage growth, contributing to inflation consistently below the Fed’s 2 percent target.

Minutes of the U.S. central bank’s July 25-26 policy meeting showed policymakers appeared increasingly cautious about weak inflation, with some urging against further interest rate increases.

But labor market strength is probably sufficient for the Fed to outline a proposal to begin offloading its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities at its next policy meeting in September.

Most economists expect another rate hike in December. The Fed has increased borrowing costs twice this year.

In a second report on Thursday, the Philadelphia Fed said its index of manufacturing in the mid-Atlantic region slipped to 18.9 this month from 19.5 in July.

Despite the modest pullback, manufacturers reported increased demand for their products. The survey’s measure of new orders surged to 20.4 from 2.1 in July. Firms also reported that shipments continued to rise.

As a result, workers put in more hours. The average workweek index increased to 18.8 in August from 3.8 in the prior month.

A third report from the Fed showed manufacturing output fell 0.1 percent in July as the production of motor vehicles and parts tumbled 3.6 percent.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Strong U.S. jobs report bolsters case for further Fed tightening

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. employers hired more workers than expected in July and raised their wages, signs of labor market tightness that likely clears the way for the Federal Reserve to announce a plan to start shrinking its massive bond portfolio.

The Labor Department said on Friday that nonfarm payrolls increased by 209,000 jobs last month amid broad-based gains. June’s employment gain was revised up to 231,000 from the previously reported 222,000.

Average hourly earnings increased nine cents, or 0.3 percent, in July after rising 0.2 percent in June. That was the biggest rise in five months. On a year-on-year basis, wages increased 2.5 percent for the fourth straight month.

“The Fed set a low bar for balance sheet normalization to begin in September, and today’s number cleared that bar with elan,” said Michael Feroli, economist at JPMorgan in New York.

Although the economy is near full employment, wage growth has not been strong in part because many of the jobs being created are in low-wage industries. Last month, restaurants and bars added 53,100 jobs.

July’s monthly increase in earnings could, however, offer Fed policymakers some assurance that inflation will gradually rise to the U.S. central bank’s 2 percent target.

Economists expect the Fed will announce a plan to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities at its next policy meeting in September. The Fed bought these securities to lower interest rates in the wake of the 2007-2009 financial crisis.

Sluggish wage growth and the accompanying benign inflation, however, suggest the Fed will delay raising interest rates again until December. It has increased borrowing costs twice this year and its benchmark overnight interest rate is in a range of 1 percent to 1.25 percent.

The dollar rose and was set for its biggest one-day gain versus a basket of currencies this year, while prices for U.S. Treasuries fell. Stocks on Wall Street edged higher. [.N]Economists had forecast payrolls increasing by 183,000 jobs and wages rising 0.3 percent in July.

Republican President Donald Trump, who inherited a strong job market from the Obama administration, cheered Friday’s employment data. “Excellent Jobs Numbers just released – and I have only just begun,” Trump said on Twitter. “Many job stifling regulations continue to fall. Movement back to USA!”

Trump has pledged to sharply boost economic growth and further strengthen the labor market by slashing taxes, cutting regulation and boosting infrastructure spending.

But after six months in office the Trump administration has failed to pass any economic legislation and has yet to articulate a plan for much of its economic agenda.

UNEMPLOYMENT RATE FALLS

Wage growth is crucial to sustaining the U.S. economic expansion after output increased at a 2.6 percent annual rate in the second quarter, an acceleration from the January-March period’s pedestrian 1.2 percent pace.

The economy also got a boost from another report on Friday showing a sharp drop in the trade deficit in June.

The unemployment rate dropped one-tenth of a percentage point to 4.3 percent in July, matching a 16-year low touched in May. It has declined five-tenths of a percentage point this year and is now at the most recent Fed median forecast for 2017.

“Stable year-on-year wage growth should decrease the perceived risk of further slowing in wages and prices,” said Andrew Hollenhorst, an economist at Citigroup in New York.

“Strong payroll gains that place downward pressure on the post-crisis low unemployment rate will keep the center of the Fed comfortable with increasing policy rates in December.”

July’s decline in the jobless rate came even as more people entered the labor force, underscoring job market strength.

The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose one-tenth of a percentage point to 62.9 percent. The share of the population that is employed climbed to 60.2 percent, matching an eight-year high touched in April.

A broad measure of unemployment, which includes people who want to work but have given up searching and those working part time because they cannot find full-time employment, was unchanged at 8.6 percent last month. This alternative gauge of unemployment hit a 9-1/2-year low in May.

Monthly job growth this year has averaged 184,000, close to the 2016 average of 186,000. The economy needs to create 75,000 to 100,000 jobs per month just to keep up with growth in the working-age population.

Manufacturing payrolls advanced by 16,000 jobs in July, the largest gain since February. Employment in the automobile sector rose by 1,600 despite slowing sales and bloated inventories that have forced manufacturers to cut back on production.

U.S. auto sales fell 6.1 percent in July from a year ago to a seasonally adjusted rate of 16.73 million units. General Motors Co and Ford Motor Co have both said they will cut production in the second half of the year.

Construction payrolls rose 6,000 last month as hiring at homebuilding sites increased 5,100. The professional and business services sector added 49,000 workers last month.

Retail employment rose by 900 as hiring at motor vehicle and parts dealerships as well as online retailers offset a drop of 10,000 in employment at clothing stores.

Companies like major online retailer Amazon are creating jobs at warehouses and distribution centers. Amazon this week held a series of job fairs to hire about 50,000 workers. Government payrolls rose by 4,000 in July.

(Reporting by Lucia Mutikani; Editing by James Dalgleish and Paul Simao)

Wall Street opens higher, Dow rises to record high

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 20, 2017.

By Sweta Singh and Ankur Banerjee

(Reuters) – U.S. stock indexes opened higher on Monday, with the Dow hitting a record high, as investors remained optimistic on corporate earnings in the second quarter.

Investors have been counting on earnings to support the relatively high valuations for equities, with the S&P 500 trading at about 18 times earnings estimates for the next 12 months, above its long-term average of 15 times.

Of the 289 S&P 500 companies that reported results until Friday, 73 percent of them beat analyst expectations. This is above the 71 percent average over the past four quarters, according to Thomson Reuters.

The S&P 500 slipped on Friday on negative reactions to earnings reports from high-profile names such as Amazon, Exxon and Starbucks and a drop in shares of tobacco companies.

“We had a choppy week last week, we had a very erratic week, so coming off a erratic week, we’re getting some early morning premarket bargain hunting,” said Andre Bakhos, managing director at Janlyn Capital LLC.

“We’re not having anything coming that the markets can sink their teeth into.”

Apple Inc, a part of the Dow, is expected to report quarterly results after market close on Tuesday and its performance may hold the sway over tech stocks this week.

At 9:37 a.m. ET (1337 GMT) the Dow Jones Industrial Average was up 61.07 points, or 0.28 percent, at 21,891.38, the S&P 500 .SPX was up 4.68 points, or 0.19 percent, at 2,476.78 and the Nasdaq Composite was up 18.28 points, or 0.29 percent, at 6,392.96.

Seven of the 11 major S&P sectors were higher, with the financial index’s 0.38 percent rise leading the gainers.

On data front, contracts to buy previously owned homes rebounded in June after three straight monthly declines.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed last month, jumped 1.5 percent to a reading of 110.2.

The Federal Reserve of Dallas will release its monthly manufacturing index for July at around 10:30 a.m. ET.

Oil prices rose on Monday, putting July was on track to become the strongest month for the commodity this year.

Scripps Network was up 1.23 percent at $87.98 premarket after Discovery Communications said it would buy the media company for $14.6 billion.

Charter Communications Inc shares were up 4.3 percent at $386.13 after the U.S. cable operator said on Sunday it was not interested in buying wireless carrier Sprint Corp.

Shares of Snap Inc fell 4.1 percent to $13.10 and hit a record low, as a share lockup ended, allowing for sales by early investors and pushing it further below its March initial public offering price.

Advancing issues outnumbered decliners on the New York Stock Exchange by 1,495 to 1,017. On the Nasdaq, 1,278 issues rose and 971 fell.

(Reporting by Ankur Banerjee, Sweta Singh, and Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

Dollar edges lower versus yen before Yellen testimony; sterling off lows

A U.S. five dollar note is seen in this picture illustration June 2, 2017. REUTERS/Thomas White/Illustration

By Saikat Chatterjee

LONDON (Reuters) – The U.S. dollar fell against the yen and languished at 14-month lows against the euro on Wednesday ahead of Federal Reserve Chair Janet Yellen’s appearance in Congress to give testimony on monetary policy.

As investors sought to take profits after a recent dollar rally on the back of a broadly mixed session for risky assets, the greenback’s rise was also halted thanks to a softening of U.S. Treasury yields this week.

The dollar edged 0.4 percent lower against the yen to 113.43 <JPY=EBS> in early trades after rising more than 5 percent over the last month. It was trading at 1.14565 against the euro, its lowest level since early May. <EUR=EBS>

“The Yellen testimony remains the key event risk in today’s session but we remain optimistic about the dollar’s outlook and putting on a long position against sterling is the best way to execute that view,” said Adam Cole, head of FX strategy at RBC Capital Markets in London.

Yellen will give her semi-annual monetary policy testimony before Congress later on Wednesday and on Thursday, and investors will be parsing it for clues on when the Fed will start reducing its massive balance sheet.

Strategists at Brown Brothers Harriman don’t expect Yellen to break new ground in her testimony.

The Fed raised rates last month to a range of 1 percent to 1.25 percent and market expectations are roughly of a 50 percent probability that interest rates will rise again before the end of the year, according to the CME’s Fed watch data.

UK PROSPECTS

While there is a 50 percent probability for the Bank of England to raise interest rates too before the end of the year, markets are expecting the central bank to strike a dovish stance after recent soft data and comments from policymakers.

In an interview for a Scottish newspaper, the Press and Journal, published on Wednesday, Bank of England Deputy Governor Ben Broadbent said that while there was reason to see the bank moving towards higher rates, there were “a lot of imponderables”.

His comments pushed sterling to a two-week low against the dollar <GBD=D3> and to its lowest in eight months against the euro in early trading on Wednesday.

While subsequent wages data pulled sterling from the day’s lows, the outlook remained wary.

In other currencies, the Canadian dollar <CAD=> was slightly higher against its U.S. counterpart as investors awaited a Bank of Canada interest rate decision later on Wednesday.

(Editing by Gareth Jones)

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