A closely watched report released by the Labor Department on Friday showed employment in the U.S. jumped by much more than anticipated in the month of July.
The report said non-farm payroll employment surged up by 209,000 jobs in July after spiking by an upwardly revised 231,000 jobs in June.
Economists had expected employment to climb by 183,000 jobs compared to the addition of 222,000 jobs originally reported for the previous month.
The Labor Department said the bigger than expected increase in employment reflected notable job growth in food services and drinking places, professional and business services, and healthcare.
The report also showed a jump in employment in the leisure and hospitality sector as well as an increase of 16,000 manufacturing jobs.
With the stronger than expected job growth, the unemployment rate edged down to 4.3 percent in July from 4.4 percent in June. The modest decrease matched economist estimates.
The report said the labor force expanded by 349,000 people, while the household survey of employment showed a nearly matching increase of 345,000 people.
The Labor Department also said average hourly employee earnings rose by 0.3 percent to $26.36 in July. Average hourly earnings were up 2.5 percent year-over-year, unchanged from the previous month.
"Following the disappointing ISM surveys for July, released earlier this week, this employment report provides reassurance that the real economy remained solid at the start of the third quarter," said Michael Pearce, U.S. economist at Capital Economics.
He added, "If the labor market continues to tighten over the coming months, as the survey evidence suggests it will, the Fed will press ahead with rate hikes and balance sheet normalization later this year."
After leaving interest rates unchanged last month, the Federal Reserve's next monetary policy meeting is scheduled for September.
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