The rise in the unemployment rate took some tension out of the markets, which have been on edge about the timing of the upcoming Fed rate hikes. Bobbi Rebell reports.
The pressure is off. The jobs report came in with just the right balance to give the Federal Reserve more room to keep interest rates low, for a while. Non-farm payrolls - up 209,000 last month- weaker than forecasts- but still solid. The unemployment rate ratcheting up to 6.2 percent- but because more workers are feeling confident enough to try to get back into the market. Most of the gains were in the services sector- though manufacturing payrolls were up for the 12th month in a row. LPL Financial's John Canally: SOUNDBITE: JOHN CANALLY, ECONOMIST, LPL FINANCIAL (ENGLISH) SAYING: "In general, of some of the dozen or so indicators that Fed Chair Yellen looks at, only half of them, at most, are back to where they were at the downturn. So I still think there is a long way to go for the job market to recover to get back to normal, and I still so that gives the Fed I think a pretty long runway before it has to think about taking up the slack in monetary policy." In other words- there is still a long road ahead. That's because while July marked the 6th month in a row that employment has expanded by more than 200,000, average hourly earnings rose only a penny. That left the annual rate of increase at 2.0 percent, still well below the levels that would make Fed officials nervous. Jason Furman, Chairman of the Council of Economic Advisors: SOUNDBITE: JASON FURMAN, CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISORS (ENGLISH) SAYING: "There is no question that one of the biggest challenges we face is raising wages. What you generally tend to see is that first you get your unemployment rate down and then the greater tightness in the labor market starts to put some upward pressure on wages. Over the last year or two we have seen faster wage growth but it's still nowhere near the wage growth that we need." The report also had other areas for concern: there were more long-term unemployed, and the time it takes Americans to get jobs rose after reaching its lowest point in five years back in June.