HomeBusinessUS jobs growth slowed...

US jobs growth slowed more than forecast in July

Receive free US employment updates

US jobs growth was weaker than forecast in July and was revised lower for the previous two months, with the labour market cooling after almost 18 months of interest rate rises.

The economy added 187,000 new non-farm jobs, according to data released by the Bureau of Labor Statistics on Friday, compared with forecasts of 200,000.

That followed a downwardly revised 185,000 in June — and could be taken as an encouraging sign that the Federal Reserve is making progress in its fight against inflation.

The Fed and investors have been closely monitoring the health of the labour market, as wages and jobs growth are critical contributors to inflation.

However, the labour market more broadly was still in robust shape, with the unemployment rate dipping to 3.5 per cent.

Hourly earnings growth was stronger than expected at 4.4 per cent year on year, well above the levels considered consistent with the Fed’s 2 per cent inflation target. Wages grew 0.4 per cent month on month, compared with consensus forecasts of 0.3 per cent.

Optimism has grown in recent weeks that the central bank is on track to bring inflation under control without driving the economy into a severe recession. Consumer price inflation fell further than expected in June, while the central bank’s preferred indicator — the core measure of the personal consumption expenditure index — also retreated to its lowest level since October 2021. 

However, the Fed has warned that persistent strength in the labour market may make it harder to bring inflation all the way down to its target.

“I think markets have been overly optimistic with the last sets of inflation numbers,” said Agron Nicaj, US economist at MUFG. “As long as consumer spending remains high and the labour market remains strong, I would expect inflation to remain elevated.”

Job gains in recent months have been spread across sectors, but Nicaj said he would be paying particular attention to any signs of weakness in manufacturing. Manufacturing employment slipped by 2,000.

A survey by the Institute for Supply Management earlier this week suggested activity in the politically important sector was contracting, and Nicaj said “a lot of signs suggest that it will be one of the first industries to have consistently negative employment growth”.

The Fed last week lifted interest rates to their highest level in 22 years and insisted it may announce further hikes if required, but futures markets suggest most investors think the central bank will hold rates steady for the rest of the year.

Markets on Thursday evening were pricing in just a 17 per cent chance that the Fed lifts rates at its next meeting in September, and about a 38 per cent chance that rates rise at least once by November.

Source link

Most Popular


Please enter your comment!
Please enter your name here

More from Author

Read Now

Team India Squad for T20 World Cup 2024 Announced: Here’s India’s official team for T20 WC – Republic World

India T20 World Cup squad announcement | Image:APTeam India's squad for the upcoming ICC T20 World Cup 2024 has been announced. On Tuesday, the selection committee led by chief selector Ajit Agarkar convened in Ahmedabad and zeroed in on a 15-member unit, which they deem is the...

Justice Minallah says state has to protect judges, independence of judiciary

Justice Athar Minallah on Tuesday said the state had to protect the judges and the judiciary’s independence as the Supreme Court took up a suo motu case pertaining to allegations of interference in judicial affairs.A six-member bench resumed...

Stock futures slip slightly as investors look ahead to Fed decision, megacap earnings: Live updates

Traders work on the floor of the New York Stock Exchange during morning trading on February 29, 2024 in New York City. Michael M. Santiago | Getty ImagesU.S. stock futures fell slightly Tuesday morning after a positive start to the week, as investors brace for megacap earnings,...

Europe’s Economic Laggards Have Become Its Leaders

Something extraordinary is happening to the European economy: Southern nations that nearly broke up the euro currency bloc during the financial crisis in 2012 are growing faster than Germany and other big countries that have long served as the region’s growth engines.The dynamic is bolstering the...

Trump’s Plans for the Fed Make No Sense, Even for Him

A second Trump administration might be very different from the first, and that includes how the president treats the Fed. Donald Trump complained a lot about the US Federal Reserve when he was president, jawboning for lower interest rates and questioning its competence. Yet at the...

Police to launch raids to find migrants to deport to Rwanda, Cabinet Minister claims

Police will mount raids to find missing migrants so they can be deported to Rwanda, a Cabinet minister has said.Health Secretary Victoria Atkins was commenting on reports that the Home Office has lost contact with thousands of people who are set to be removed from the...

The French #Metoo Scandal Unraveling in Weinstein’s Shadow

French actor Gérard Depardieu was ordered to stand trial for allegedly sexually assaulting two women on a film set three years ago, marking the latest legal escalation for the 75-year-old movie star who has become a central figure in France’s #MeToo movement.The announcement coincides with a...

Hong Kong Bitcoin and Ether ETFs Have Soft Debut

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired...

Customization Overview | Halo Infinite CU32

Operation: Banished Honor arrives on April 30 and you’re gonna want to look the part! After all, the Banished welcome all who pledge their service to Atriox, and your new allegiance and mindset demands a new outfit, so let’s find out more about the customization that...

T20 World Cup 2024 Squads: From India To Australia, Check Here Team-Wise Full Players List, Venues, Fixture, Timings And More

ICC T20 World Cup 2024 Cricket Matches Full Schedule: The T20 World Cup 2024 promises to be an exhilarating showcase of cricketing talent from around the globe. With teams from various nations competing for the prestigious title, fans can expect intense matches filled with thrilling moments...

How the Twins’ summer sausage celebration got made: It sparked the offense, but should they eat it?

CHICAGO — With Abe Froman unavailable, I called sausage expert Elias Cairo to address Rocco Baldelli’s concerns about a potentially hazardous pre-encased meat currently residing in the Minnesota Twins clubhouse.Nearly a week after it arrived and with the package showing visible signs of wear, tear and...