US unemployment dips to 3.5% as companies add 187,000 jobs in July
US job market resilient, unemployment rate dips to 3.5%, 187,000 jobs added in July. Fed raises interest rates.
The US job market remained resilient in July with the unemployment rate dipping to 3.5%. Companies added 187,000 jobs last month - a slight dip from the 200,000 roles projected by economists. The developments came even as the Federal Reserves raised its benchmark interest for the 11th time since March 2022.
“Total nonfarm payroll employment rose by 187,000 in July, less than the average monthly gain of 312,000 over the prior 12 months. Job gains occurred in health care, social assistance, financial activities, and wholesale trade,” read an official communique citing data from the US Bureau of Labor Statistics.
Meanwhile, Wall Street and other global markets were higher and the US dollar and Treasury yields lower after the data was made public.
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Hiring was up from 185,000 in June - a figure that the Labor Department revised down from an originally reported 209,000. Unemployment fell as 152,000 Americans entered the job force. The number of unemployed fell by 116,000.
Despite the influx of workers, average hourly wages rose 0.4% from June and 4.4% from a year earlier – numbers that were hotter than expected and are likely to worry the Fed. The Labor Department revised payroll figures down for both May and June, reducing the number of jobs created in those months by 49,000.
While the US economy and job market have repeatedly defied predictions of an impending recession, there are still some causes for concern. The Labor Department reported on Tuesday that job openings had fallen below 9.6 million in June - the lowest in more than two years. The numbers however remained unusually robust. Indeed, monthly job openings had never topped 8 million before 2021. The number of people quitting their jobs – a sign of confidence they can find something better elsewhere – also fell in June but remains above pre-pandemic levels.
The Fed wants to see hiring cool off. Strong demand for workers pushes up wages and can force companies to raise prices to make up for the higher costs. A growing number of economists are expressing confidence that inflation fighters at the Federal Reserve can pull off a rare “soft landing’’ – raising interest rates just enough to rein in rising prices without tipping the world’s largest economy into recession.
(With inputs from agencies)
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First Published:4 Aug 2023, 10:11 PM IST
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