Yahoo Finance US adds 528,000 jobs in July as market returns to pre-pandemic levels
The US added 528,000 jobs in July as the jobs market returned to pre-pandemic levels.
The US has now added 22m jobs since reaching a low in April 2020. The unemployment rate dipped to 3.5% in July, a half-century low and equal to its rate in February 2020 before the Covid-19 pandemic hit the US.
The far stronger than expected report comes a month after the labor department announced the economy added 398,000 jobs in June, 26,000 more than its first estimate.
Economists had been expecting jobs growth to slow in July and the latest figures from the labor department were far stronger than the average 388,000 jobs gained over the last four months.
Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and healthcare.
Economists said the news was likely to spur the Federal Reserve’s determination to raise rates and cool the economy as it struggles to tame soaring inflation.
“The unexpected acceleration in non-farm payroll growth in July, together with the further decline in the unemployment rate and the renewed pick-up in wage pressures, suggests the economy is still a long way from recession,” said Michael Pearce, senior US economist at Capital Economics. “All the details support continued aggressive rate hikes from the Fed.”
While the US economy has slowed this year, reporting two quarters of negative growth in the first six months, the jobs market has remained buoyant. But there have been signs that it too is losing steam.
Friday’s jobs report comes days after the government reported that the number of job vacancies across the US had dropped by 605,000 to 10.7m by the end of June, a decline of 5.4%. Job openings hit a record high of 11.5m on the last day of March. But even with the latest fall, there are still 1.8 jobs open for every available worker.
There are other signs that the jobs market is weakening. On Thursday the labor department said the number of people filing for unemployment benefits rose to 260,000 last week, up from 254,000 the previous week.
The figure, known as initial jobless claims, is seen as a proxy for layoffs, and is now close to its 2022 peak and higher than the weekly average of 218,000 experienced before the pandemic. Employers including Walmart, Robinhood, Twitter and Ford have all recently announced layoff plans as economic conditions have tightened.
