Still quietly great

US jobs lend some certainty in an uncertain world

Nothing seems to curb the enthusiasm of US employers. Another solid monthly jobs report on Friday, revealing that 255,000 new positions were created last month, should allay some concerns raised by a weak GDP growth estimate a week earlier. Investment by companies may be subdued as November's presidential election approaches, but overall the economy is gaining strength.

The jobless rate held steady at 4.9 per cent in July, close to the 4.8 per cent natural long-term rate of unemployment as currently estimated by the Congressional Budget Office. That means jobs are opening up at a healthy clip even as the labour market is becoming tight.

Average hourly wages also ticked higher, rising 2.6 per cent in the year to July. Combine three months of that data with increases in hours worked and job creation, and Barclays calculates that US household income overall is rising at a robust 4.6 per cent annual rate.

That ought to boost expansion for the economy at large, but it's at odds with the picture from the first official calculation of second-quarter output growth. That clocked in at a lacklustre 1.2 per cent annual rate partly due to weak investment.

Growth is expected to become stronger, but in any event the improving employment situation should make it easier for the Federal Reserve to contemplate raising interest rates, something Chair Janet Yellen and her colleagues have shown themselves reluctant to do since an initial modest hike last December. If nothing else, the data indicate that the UK's vote in June to leave the EU hasn't caused any immediate damage.

The Fed will have another monthly employment tally on hand at its next rate-setting meeting on September 20-21, as well as a better estimate of second-quarter GDP. Further readings will be available at the following confab, set to begin just a week before voters choose between Hillary Clinton and Donald Trump in the November 8 presidential election.

The contest represents another source of concern for nervous businesses and investors. At least the job market lends some certainty to an uncertain world.