The American job market remains the nation’s bright spot even as parts of the U.S. economy are flashing warnings signs.
The U.S. Labor Department will report at 8:30 a.m. Friday how many jobs the nation created in July. Economists surveyed by CNNMoney project that America added 182,000 jobs last month and that unemployment dipped down to 4.8%.
That would be a solid number, but a far cry from the gains last July when the country added 277,000 jobs. Although the U.S. has gained over 1 million jobs so far this year, it had already added 1.3 million positions by this time last year.
But the slowing job gains is also a symptom of a healthy labor market: unemployment is very low and wage growth is starting to show signs of life. Unemployment, which is currently at 4.9%, is the lowest since early 2008 before the Great Recession began.
In the first half of 2015, wage growth was pretty mediocre, averaging about 2.1%. It’s still low, but it has averaged about 2.5% in the first half of this year. That means the typical American has a little extra cash to spend, especially at a time when gas prices are quite low.
A healthy consumer is crucial: American spenders make up the majority of growth in the country.
The problem is that outside the job market, things are looking gloomy. American shoppers have been resilient so far this year, but lots of companies, from Ford to Kate Spade to Office Depot, are reporting disappointing sales.
What’s especially troubling is that businesses too are pessimistic, spending less on new buildings, projects and equipment. With uncertainty about the U.S. election, China’s slowdown and Europe’s outlook after Brexit, some business owners are pumping the brakes on big investments.
Weak business spending is one big reason why the economy is barely growing. So far this year growth has averaged about 1%.
And eventually, experts warn, if businesses keep pulling back spending, that would lead to job cuts. For now though, America’s job market appears to be holding up.