The US labor market remains robust. The July employment report from the Bureau of Labor Statistics (BLS) released this Friday includes the creation of 528,000 new jobs over the past month. The figure far exceeds analysts’ expectations, which expected the number to fall to 250,000 from 398,000 jobs created in June (revised upwards). Regarding the first reading).
The U.S. economy, the world’s largest, hasn’t added as many jobs in a month since last February, when that figure rose to 750,000. “Job Growth was widespread“in all sectors, notes the BLS in your statement.
The leisure and hospitality sector added the most jobs in July, along with professional and business services and health care.
As a result, non-farm employment and the unemployment rate in the United States have returned to levels not seen since before the pandemic of covid-19. In other words: all the jobs lost during the pandemic have been fully recovered.
Long-term unemployment, also at pre-covid levels
Concretely, unemployment in the United States fell by a tenth in July compared to the previous month, to reach the historic low of 3.5%a level not seen since February 2020. The number of jobless people in the North American powerhouse fell to 5.7 million.
At the same time, the labor force participation rate (at 62.1%) and the employment-to-population ratio (60%) remained at pre-pandemic levels, barely changing.
Among major worker groups, “unemployment rates for adult women (3.1%) and whites (3.1%) declined in July,” the BLS points out. In contrast, unemployment among adult males (3.2%), teens (11.5%), blacks (6%), Asians (2.6%) and Hispanics (3.9%) has to barely changed.
As for long-term unemployment (those who have been unemployed for 27 weeks or more), it fell by 269,000 people in July, down to 1.1 million. A benchmark that has also returned to its pre-pandemic level.
However, figures released yesterday by the US Department of Labor showed that initial jobless claims increased slightly throughout the last week of last month.
An “incredibly strong” labor market gives more wings to the “hawks” of the Fed
“The payroll number [no agrícolas] of the United States exceeded consensus forecasts for the third consecutive time“, underlines James Knightley, economist at ING Economics.
“The July jobs report far exceeded expectations for job and wage growth, showing that despite growing fears of recessionthe labor market remains incredibly strong,” analysts at Oxford Economics said.
This Friday’s BLS report shows that Average hourly earnings increased 5.2% year-on-year and 0.5% month-on-month in July (0.3% expected as the previous month), at 32.27 dollars.
“The resilience of the labor market provides the Fed with both the reason and the space to focus on fighting inflation”
“This bodes well that personal incomes will continue to rise and support consumer spending. However, this jobs report also means that the Federal Reserve is far from done” with tightening monetary policy to curb inflation salary, explain Lydia Boussour and Kathy Bostjancic of Oxford Economics.
“The resilience of the labor market provides the Federal Reserve with both the reason and the space to focus on fighting inflation,” these experts point out.
Therefore, the latest North American labor market benchmarks are fueling anticipation that the US central bank will continue to raise rates sharply. Last week he did it in 75 basis points, as in the previous meeting. But it has been 28 years since the Fed last raised interest rates on this scale.
