U.S. Job Growth Far Exceeds Expectations In July
(RTTNews) - Employment in the U.S. jumped by much more than expected in the month of July, according to a closely watched report released by the Labor Department on Friday.
The report showed non-farm payroll employment spiked by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June.
Economists had expected employment to climb by about 250,000 jobs compared to the addition of 372,000 jobs originally reported for the previous month.
The Labor Department said job growth was widespread, led by gains in the leisure and hospitality, professional and business services, and healthcare sectors.
Michael Pearce, Senior U.S. Economist at Capital Economics, said the stronger than expected job growth combined with a drop in the unemployment rate and a renewed pick-up in wage pressure "make a mockery of claims that the economy is on the brink of recession."
"This raises the odds of another 75bp rate hike in September, although the outcome depends more on the evolution of the next couple of CPI reports," Pearce added.
The report showed the unemployment rate unexpectedly edged down to 3.5 percent July from 3.6 percent in June. The unemployment rate was expected to remain unchanged.
With the unexpected decrease, the unemployment rate fell to its lowest level since hitting a matching rate in February of 2020, just before Covid-19 lockdowns began to take effect in the U.S.
The unexpected dip in the unemployment rate came as the labor force shrank by 63,000 people, while the household survey measure of employment increased by 179,000.
The Labor Department also said average hourly earnings rose by $0.15 or 0.5 percent to $32.27 in July. The annual rate of wage growth was unchanged at 5.2 percent.
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