Recruitment surges in July, US employers create 528,000 jobs last month, Labor Department Told Friday. This far exceeded economists’ expectations for a gain of 250,000 new jobs during this period. It was also a jump from the previous month, when businesses added 372,000 Jobs Despite the highest inflation in 40 years.
The unemployment rate fell from 3.6% in June to 3.5%, the lowest since February 2020, just before the outbreak of the COVID-19 pandemic in the US, before the latest payrolls report, the economy adding about 450,000 jobs per month Was.
Both total non-farm employment and unemployment rates have returned to their pre-pandemic levels.
Number of jobs directly. Underscores the resilience of the economy after quarters of falling GDP, which is considered a hallmark of recession. Despite this shrinking economic growth, businesses continue to add jobs and hold onto their existing workforce amid strong consumer demand.
“It’s a job market that just won’t quit. It’s challenging the laws of economics,” Becky Frankiewicz, chief commercial officer of the hiring company ManpowerGroup, said in an email after the data was released. “Economic indicators are indicating caution, yet US employers are indicating confidence.”
Why Stocks May Fall
Last month’s fast-paced job is likely to impact stocks in the short term as it suggests the Federal Reserve may continue to aggressively raise interest rates to tame inflation. According to FactSet, S&P 500 futures were down 0.7% before the market opened on Friday.
The central bank is raising rates in an effort to contain inflation at the hottest level in four decades. With the Fed raising four rates so far this year, it is becoming more expensive for consumers and businesses to borrow. Economists had expected this to contribute to businesses holding back from hiring, but July’s numbers show employers are continuing to add workers.
The July payrolls data “reflect an economy operating at a very strong level, which is clearly not in recession and which could face tighter monetary policy,” Wall Street analyst Adam Crisufuli of Vital Knowledge told a client. Said in the note.
Despite the strong labor market, other indicators show the economy is slowing as the Fed pumps the brakes. Some analysts say that job growth alone is an unreliable indicator of a recession, noting that hiring often remains strong in the early stages of a recession.
For example, in the three months just before the housing crash-induced recession that began in December 2007, the Labor Department’s monthly payroll survey showed the economy gaining about 300,000 jobs per month, according to Societe Generale Cross Asset Research.
