Key questions raised by July's jobs report

— -- The U.S. economy added 209,000 jobs in July according to the Labor Department, well above the expected gain of 180,000.

The unemployment rate, now at a 16-year low, was little changed at 4.3 percent. U6 – a broader measure of our unemployment – was steady at 8.6 percent.

June's job gains were also revised higher from 222,000 to 231,000, while the May figures were revised lower from 152,000 to 145,000.

For IHS Markit chief economist Nariman Behravesh, it was a solid report.

“There was lots of good news in today’s jobs report,” Behravesh said. “For the past two months, payroll jobs gains have exceeded 200,000.”

According to Glassdoor’s chief economist Dr. Andrew Chamberlain, the report “revealed the economy continued its remarkable summer growth spurt in July.”

Hiring was widespread; bars and restaurants created the most jobs, while professional and business services and health care were also strong performers.

Most other industries were flat or up slightly for the month.

But the jobs report also raised two key questions:

1. With so much new job creation and a tightening labor market, why aren’t wages rising more?

Average hourly earnings rose by 9 cents to $26.36 in July, the fastest pace since February. But year-over-year, wages remained stagnant at 2.5 percent for the fourth consecutive month.

“Since April, momentum has turned to the downside,” Stifel fixed income chief economist Lindsey Piegza said.

2. What happens to retail?

The industry added just 900 jobs in July. According to outplacement firm Challenger, Gray & Christmas, retail is the leading industry for job cuts, with nearly 64,000 announced job cuts so far this year.

“Even with Amazon.com hiring tens of thousands of people, drawing huge lines to its job fairs, not all of those lost jobs can be absorbed through online sales, wholesaling and distribution," said Mark Hamrick, Bankrate.com's senior economic analyst.

Many economists also believe the stronger than expected report will lead the Federal Reserve to hike interest rates again in December.

Remember: when the Fed hikes rates, it means the cost of borrowing goes up – everything from your credit cards, to auto loans, to mortgages tend to get more expensive.