- Stable Employment Numbers in the US Point to Economic Resilience
- Employers Add 187,000 Jobs, Unemployment Rate Drops to 3.5%
- Labor Market Shows Resilience Amid Economic Uncertainties
Last month, employment remained stable in the United States, bolstering expectations that the economy will avoid a painful downturn.
Similar to June, employers added 187,000 positions, while the unemployment rate fell from 3.6% to 3.5%, according to the Labour Department.
The report was the most recent indication of the United States’ economic resilience, despite a significant increase in borrowing costs.
Since last year, hiring has declined and was weaker than anticipated in July, but it has held up better than many anticipated.
Since last year, when the Federal Reserve began aggressively increasing borrowing costs in response to prices rising at the fastest rate in four decades, economists have anticipated a decline in the world’s largest economy.
June’s 3% inflation rate has plummeted since the Fed raised rates.
Jerome Powell, chairman of the Federal Reserve, has stated, however, that policymakers require additional indicators of an economic slowdown before they can be confident that their efforts are bearing fruit.
Analysts stated that the most recent data was unlikely to resolve the issue, citing the fact that the unemployment rate remained near historic lows and wage gains were stronger than anticipated, despite the decline in hiring.
According to the Labour Department, the average hourly wage in July was 4.4% higher than it was a year earlier.
Last month’s results indicated that employment growth had begun to slow, and today’s figures suggest that a downward trend may be developing,” said Richard Flynn, managing director of Charles Schwab UK.
While this should be encouraging for policymakers as they continue to combat persistent inflation, the Federal Reserve would likely prefer wage gains closer to 3%.
July’s addition of 187,000 positions fell short of the approximately 200,000 that analysts had anticipated.
Manufacturing, transportation, technology, and media firms have reduced employment. The majority of other industries expanded, with healthcare firms leading the way.
The Labour Department also reported that June and May’s hiring was weaker than previously estimated.
According to analysts, however, employment growth has remained robust enough to accommodate growth in the labor force.
This has raised expectations that the economy will slow gradually, avoiding a sharp contraction that would result in the unemployment of millions of people.
Julia Pollak, economist at Zip Recruiter, said Friday’s report was “just right,” while Mark Zandi, chief economist at Moody’s Analytics, stated that it “couldn’t have been better.”
