Employers added 157,000 jobs in July - 33,000 fewer than expected and well below the 248,000 created in June.
Although the July hiring number fell below economists' expectations, the government revised the previous months' job gains by an additional 59,000.
The unemployment rate fell 0.1 percentage point to 3.9% in July, the US Department of Labor said, near to the 18-year low it reached in May.
The economy expanded at a 4.1 per cent annual rate in the April-June quarter, the strongest showing in almost four years.
"The important point is that there is no sign of overheating but that aggregate wages and salaries (jobs x hours x earnings) are growing at a brisk pace", Neil Dutta, the head of U.S. economics at Renaissance Macro, said in a note. Despite a fall in employment in the transportation and utilities sectors, the overall rate of unemployment dipped to 3.9 per cent in July from 4 per cent in June.
Workers with only a high school degree also seem to be doing relatively better, with a 4.0 percent unemployment rate matching the prerecession low (it had been 3.9 percent in May), although still above the 3.2 percent low hit in 1999. Over the past year, manufacturers have hired 327,000 people, the most since the 12 months through April 1995.
Businesses are also getting less picky in their hiring.
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But a big drag came from sporting goods, hobby, book, and music retailers, which lost 31,800 jobs on net. Consumer prices rose 2.9 percent in June from a year earlier, more than the average wage gain.
Wages remain the only red flag in the US labor market.
One cloud on the horizon has been the Trump administration's trade fights with China, the European Union, Canada and Mexico.
Friday's report confirms that trajectory, which would bring the benchmark rate to 2.25 to 2.5 percent by the end of the year. Economists' maintain that wages will rise as economy drains remaining slack from the labor market and businesses' pay more to retain workers.
"The more you make an employee healthy and happy, the more that they're going to stay with you", England said.
Another month of sluggish wage gains could help cool fears the economy could be overheating but are unlikely to dissuade the Federal Reserve from raising interest rates next month for the third time this year. That means that, after adjusting for inflation, wage growth actually has slowed from its pace in 2015-16.