The unemployment rate fell to 3.9% in July

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The US labor market continues to strengthen. The unemployment rate fell to 3.9% and the economy added 157,000 jobs in July, the Labor Department said Friday.

But paychecks grew only slightly — up 2.7% compared to the same time last year.

“With inflation running at a roughly 2% rate, that means that there’s not a lot of financial wiggle room for many Americans,” said Mark Hamrick, Bankrate.com’s senior economic analyst.

The labor market has accelerated as the economy expands. The economy grew at 4.1% during the second quarter, its fastest place in nearly four years.

The government revised the previous months’ job gains by an additional 59,000. With revisions, job gains have averaged 224,000 a month.

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