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Aug 1, 7:30 AM EDT

Solid US job gains expected for 6th straight month


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WASHINGTON (AP) -- With a host of reports this week pointing to a healthier U.S. economy, analysts expect Friday's monthly jobs report to send a similar message.

Economists predict that the government will say employers added 225,000 jobs in July, according to a survey by data provider FactSet. That would follow June's big 288,000 increase. And it would mark the sixth straight month of gains above 200,000, the longest such stretch since 1997.

The Labor Department will issue the jobs report at 8:30 a.m. Eastern time.

This year's burst of hiring has lowered the unemployment rate to 6.1 percent from 6.7 percent at the start of the year. The rate is now the lowest it's been in six years.

Economists think the rate will remain at 6.1 percent for July, particularly if more people start looking for jobs. The government counts people as unemployed only if they're actively seeking work. So when more people start looking, the unemployment rate can rise or remain flat - even if hiring picks up.

More encouraging economic news could stoke fears among investors, though, that the Federal Reserve will decide to raise its benchmark short-term interest rate sooner than expected. Such fears likely contributed to Thursday's 317-point plunge in the Dow Jones industrial average - its worst day since February.

The economy strengthened significantly during the April-June quarter, the government said Wednesday, after contracting sharply in the first three months of the year. Last quarter's bounce-back assuaged fears that the economy hadn't been strong enough to support this year's rapid hiring.

The economy expanded at a 4 percent seasonally adjusted annual rate in the second quarter after a steep 2.1 percent contraction in the first quarter. Americans stepped up their spending, particularly on autos, furniture and other big-ticket items. Businesses also spent more on plants, office buildings and equipment.

Signs suggest that employers have kept hiring at a healthy pace. ADP, a private payroll provider, said Wednesday that businesses added 218,000 jobs in July, with most industries showing solid gains. (ADP's figures capture only private businesses and sometimes diverge from the government's more comprehensive numbers.)

In addition, far fewer Americans are seeking unemployment benefits, a sign that companies are cutting few jobs. The number of first-time applications for benefits fell two weeks ago to its lowest level in 14 years. The four-week average of applications is at an eight-year low. When companies are confident enough to retain their staffs, it suggests that hiring will pick up.

Americans are also slowly gaining confidence in the economy, which means spending could accelerate in coming months. The Conference Board's consumer confidence index jumped to its highest level in nearly seven years in July.

The Conference Board's survey also asks Americans whether they consider jobs "plentiful" or "hard to get." In July, the percentage who chose "plentiful" rose to 15.9 percent, the most since May 2008. Consumers' perceptions of the job market have been a generally reliable predictor of the unemployment rate.

Yet the pickup in hiring has yet to translate into larger paychecks for most Americans, thereby hobbling the recovery. Average hourly pay has risen just 2 percent in the past year, barely keeping pace with inflation. In a healthy economy, wages before inflation would increase 3.5 percent to 4 percent annually.

Weak pay gains are restraining the housing market, usually a key driver of growth. A measure of signed contracts to buy homes slipped in June, the National Association of Realtors said this week. That suggests that home sales will decline in coming months.

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