In July, US employers added more jobs than forecast, illustrating rock-solid labor demand that tempers recession fears and suggests that the Federal ReserveFederal Reserve will press on with steep interest-rate hikes to thwart inflation.
Non-farm payrolls jumped 528,000 last month, a leap that beat all estimates and was the largest in five months, Labor Department data showed Friday. Employment in the previous month was revised up to 398,000. The unemployment rate fell to 3.5%, matching a five-decade low. Wage growth accelerated and labor force participation rate decreased.
The median payrolls gain and the jobless rate at 3.6% were predicted by the median estimates in a Bloomberg survey of economists. Treasury yields went up, the S&P 500 index futures plunged and the dollar went up sharply.
Here is the reaction in real time on Bloomberg's TOPLive blog.
The report shows a steady appetite for labor in a number of industries despite growing concerns about an economic downturn. The gain in payrolls was broad, led by increases in accommodation and food services, health care, and professional and business services.
The July payrolls data gives Fed officials reason to continue their aggressive monetary policy approach against a backdrop of decades-high inflation. Chair Jerome Powell last week held open the possibility that officials could raise rates by 75 basis points for a third time at their next meeting in September, depending on inflation and economic data between now and then.
The approval ratings of President Joe Biden have been weak ahead of the midterm elections, and they are a good news for President Joe Biden.
The average hourly earnings went up by 0.5% in July after an upwardly revised 0.4% gain in the previous month. Earnings for the second month went up 5.2% from a year ago. An elevated rate of earnings growth suggests that inflationary pressures will persist, a concern for Fed policy makers.
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