US economy added just 187,000 jobs in July: Hiring comes in lower than expected as labor market loses steam
- US economy added 187,000 jobs last month, fewer than economists expected
- But the unemployment rate dipped to 3.5% in a sign job market remains tight
- Main US stock indexes opened moderately higher following the report
US employers added 187,000 jobs last month, fewer than expected, as the labor market slowed in the face of higher interest rates.
Still, the unemployment rate dipped slightly to 3.5 percent, remaining near six-decade lows, in a sign that the job market remains resilient and raising hopes the US could avoid a long-expected recession.
The main US stock indexes opened higher following the Labor Department’s employment situation report on Friday, with the Dow Jones Industrial Average rising 152 points, or 0.43 percent, in early trading.
Job creation last month rose from 185,000 in June, a figure that the Labor Department revised down from an originally reported 209,000. Economists had expected to see 200,000 new jobs in July.
Still, last month’s hiring remained solid, considering that the Federal Reserve has raised its benchmark interest 11 times since March 2022. In 2019, a pre-pandemic year of economic growth, monthly job creation averaged 163,000.
US employers added 187,000 jobs last month, as the labor market slowed but continued to show strength in the face of higher interest rates
The labor force participation rate was unchanged at 62.6 percent for the fifth consecutive month, matching a pre-pandemic low last seen in August 2018.
The US economy and job market have repeatedly defied predictions of an impending recession.
Increasingly, economists are expressing confidence that inflation fighters at the Federal Reserve can pull off a difficult ‘soft landing’ – raising interest rates just enough to tame inflation without tipping the world’s largest economy into recession.
Consumers are feeling sunnier too: The Conference Board, a business research group, said that its consumer confidence index last month hit the highest level in two years.
There’s other evidence the job market, while still robust, is losing momentum.
The Labor Department reported Tuesday that job openings fell below 9.6 million in June, lowest in more than two years.
Still, compared to pre-pandemic norms, the numbers remain unusually robust: Monthly job openings never topped 8 million before 2021.
A ‘now hiring’ sign is seen on the window of a Ross clothing store in Rockville, Maryland last month.
The number of people quitting their jobs – a sign of confidence they can find something better elsewhere – also fell in June but remains above pre-pandemic levels.
The Fed wants to see hiring cool off. Strong demand for workers pushes up wages and can force companies to raise prices to make up for the higher costs.
Developing story, more to follow.
