US jobs lift Fed bond hopes

US employers hired more workers than expected in July and raised their wages, signs of labour market tightness that likely clears the way for the Federal Reserve to announce a plan to start shrinking its massive bond portfolio.

The US Labour Department said non-farm payrolls increased by 209,000 jobs last month amid broad-based gains. June’s employment gain was revised up to 231,000 from the previously reported 222,000.

Average hourly earnings increased 9c, or 0.3%, in July after rising 0.2% in June. That was the biggest increase in five months. On a year-on-year basis, wages increased 2.5% for the fourth straight month.