The July jobs report topped expectations
and sent the unemployment rate to a 16-year low.

And economists almost uniformly see this report as good news for the economy.

“This was a banner jobs report,” said Jed Kolko, chief economist at Indeed.

“With the strong payroll number in July, job growth in the past three months is ahead of the 2016 pace and way ahead of what’s needed to keep up with population growth. Working-age adults are now more likely to be employed than at any time since the recession.”

In July the U.S. economy added 209,000 jobs and the unemployment rate fell to 4.3%. Expectations were for payrolls to grow by 180,000. The unemployment rate fell as expected.

Shortly after the report’s release, President Donald Trump tweeted about the report, saying “Excellent Jobs Numbers just released – and I have only just begun.”

“For the second straight month, payroll employment beat consensus expectations,” said Neil Dutta, head of economics at Renaissance Macro.

“The July employment report was solid all around with strong payroll growth, rising earnings, and an improvement in labor force participation. The labor market data seems consistent with an economy growing 2.5 to 3.0 percent, not 2.0 percent.”

By industry, job gains were concentrated in the services sector with leisure and hospitality employment rising by 62,000 in July while the education and health services industry added 54,000 jobs. Professional and business services jobs rose by 49,000 in July.

Overall, 22,000 jobs were added to the goods-producing sector, with 16,000 jobs added in manufacturing and 6,000 added in construction.

The underemployment rate, which includes those out of work as well as folks working part-time but who would like full-time work, held steady at 8.6%. This rate has gotten more attention of late as President Trump’s chief economic advisor Gary Cohn has said this number is a point of emphasis for the administration. At the peak of the last labor market cycle in 2007, this rate fell below 8%.

Wages still disappoint

Also closely-watched on Friday were data on wage gains, which came in better-than-expected but still a bit disappointing given the job gains we’ve seen over the last couple years. Average hourly earnings in the U.S. rose 0.3% over the prior month in July and 2.5% over the prior year.

Michael Pearce, U.S. economist at Capital Economics, said in a note Friday that this report showed “signs that wage growth is starting to edge higher again.” The month-on-month increase in wages, for example, was the largest since October 2016.