A slowing rate of job growth in July nonetheless managed to pull some workers off the sidelines, but wage growth mired at 2.7 percent began to elicit concerns that wages will fail to keep up with inflation as the economy picks up steam.

At 157,000, the number of jobs created last month fell short of expectations, but upward revisions of the previous two months and a broad base of new jobs across industries left economists relatively sanguine about the miss.

“I don’t think you want things to be ‘great’ because great means the Fed worries about inflation and the economy moving ahead too quickly,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute. “The expansion killer is the Fed making a mistake, moving too fast. We don’t want to see great right now. We just want to see good.”

Upward revisions to May and June added a combined total of 59,000 jobs added, bringing the monthly average to 224,000 over the past three months.

“In the past, summer months tend to show large employment fluctuations due to the timing of seasonal hiring,” National Retail Federation chief economist Jack Kleinhenz said in a statement. The retail sector eked out a small gain of 7,000 despite a loss of 32,000 jobs, largely due to the closure of the Toys R Us chain.

The labor market sectors with the most notable growth in July were professional and business services, which added 51,000 jobs; and manufacturing and healthcare/social assistance, which added 37,000 and 34,000 jobs, respectively.

“U.S. manufacturing is flexing some muscle right now,” said Mark Hamrick, senior economic analyst at Bankrate.com, but noted these and other labor market gains could be threatened by President Donald Trump’s protectionist sentiments. “Obviously, there are huge risks associated with the trade dispute,” he said.

If wage growth doesn’t kick into high gear, increasing inflation could swallow even the minimal improvement in purchasing power workers have attained in the recovery so far.

“I don’t think we’ve seen the brunt of the tariffs yet,” said Arne Kalleberg, professor of sociology at the University of North Carolina at Chapel Hill. Manufacturing and agriculture-related jobs would be especially at risk if China or the European Union enact retaliatory sanctions, he said.

Derailing the current labor market expansion could hurt the most at-risk members of the workforce the most and slow mediocre wage growth even further, even as rising inflation erodes the value of Americans’ pay.

“We have to think about the fact that inflation’s running at a 2 percent rate,” Hamrick said. “We’re on this rising interest rate trajectory.” If wage growth doesn’t kick into high gear, increasing inflation could swallow even the minimal improvement in purchasing power workers have attained in the recovery so far.

Economists say demographics are one factor behind wage growth that trails what most experts consider the low end of healthy wage growth by nearly a full percentage point. As baby boomers leave the workforce, the younger and generally less-experienced workers taking their place don’t earn as much.

A yawning skills gap is another. Economists say a robust economy is drawing people back into the workforce, but this could be one of the factors holding down wage growth. “What businesses are having to do is they can’t find people with skills, so they have to hire them at unskilled wages and then train them,” said Dan North, chief economist at Euler Hermes North America.

The data bears this out: Compared to the topline unemployment rate of 3.9 percent, the broader U-6 measure of unemployment fell three-tenths of a percentage point to 7.5 percent in July, a percentage point lower than it was a year ago.

“Of course, the people hired without skills have lower productivity,” North added. The upshot is that unskilled workers aren’t being paid as much, which economists theorize could be holding down wage gains.

With fewer skills and lower productivity, these would be the workers most likely to lose out if companies have to start cutting jobs in response to a trade war-initiated slowdown. “I always worry about the quality of these jobs,” Kalleberg said. “There’s very little bargaining power on the part of workers.“