Less than anticipated, 187,000 jobs were added by U.S. firms last month as the economy continues to be negatively impacted by increasing interest rates.
However, the unemployment rate decreased to 3.5%, showing that the labor market is still robust.
The Labor Department lowered the June hiring statistic from an initially reported 209,000 down to 185,000, which was an increase. 200,000 new jobs were predicted by economists to be created in July.
Even still, considering that the Federal Reserve has increased its benchmark interest rate 11 times since March 2022, hiring last month was strong.
And the news that more Americans entered the labor force last month will be welcomed by the Fed’s inflation warriors, lessening pressure on firms to raise salaries to recruit and retain workers.
As 152,000 Americans entered the workforce, the unemployment rate decreased.
There were 116,000 fewer unemployed people. Despite the increase in the labor force, average hourly salaries increased by 4.4% from a year earlier and by 0.4% from June, both of which were hotter than anticipated and are likely to worry the Fed.
May and June’s payroll data were revised downward by the Labor Department, resulting in a reduction of 49,000 jobs generated in both months. Health care organizations created 63,000 new jobs in July.
Predictions of an oncoming recession have often been disproved by the American economy and job market.
More analysts are expressing confidence that the Federal Reserve’s efforts to combat inflation can achieve a rare “soft landing,” in which interest rates are raised just enough to contain price increases without sending the world’s largest economy into recession.
Consumer confidence reportedly reached its best level in two years last month, according to the Conference Board, a business research organization.
There is additional proof that the job market is slowing down, even if it is still strong. The Labor Department announced on Tuesday that there were less than 9.6 million job opportunities in June, the lowest number in more than two years.
However, the figures are still remarkably high: Before 2021, the number of job opportunities per month had never exceeded 8 million. Although it decreased in June, the number of people quitting their jobs—a sign that they are confident they can work somewhere better—remains above pre-pandemic levels.
The Fed wants to see a slowdown in hiring. Strong demand for labor drives up wages and may compel businesses to raise prices to cover the increased costs.