Economists expected hiring to slow in 2018 because a tight labor market—consistent with a sub-4% unemployment rate—would make it difficult for businesses to find workers. The opposite has occurred, largely due to a resurgence in two categories that had been contracting, retail and manufacturing.

Through July, U.S. employers added an average of 215,000 jobs a month to payrolls. That is a marked acceleration from the 184,000 jobs added on average during the first seven months last year. And, well above the 165,000 average monthly...