US unemployment ticks up
The US unemployment rate rose for the fourth straight month in July to 4.3%, up from 4.1% the previous month, the Bureau of Labor Statistics reported on Friday. The figure is the highest since the onset of the pandemic.
The US added just 114,000 jobs last month, down from 206,000 recorded in June, and well below the 215,000 jobs per month added over the last 12 months, the data showed. Economists polled by Reuters had expected the figure to increase by 175,000.
The number of unemployed people across the US rose by 352,000 to 7.2 million, a notable increase from the 5.9 million registered a year earlier, when the jobless rate was 3.5%.
Although a number of sectors did still see employment gains – notably healthcare – the breadth of job gains continued to narrow, with 49.6% of industries reporting an increase in employment, down from 56.0% in June.
Average hourly earnings increased 0.2% in July after climbing 0.3% in the previous month. In the 12 months through July, wages increased 3.6%, demonstrating the smallest year-on-year growth since May 2021, and leaving wage growth just above the 3.0%-3.5% range seen as consistent with the Fed’s 2% inflation target.
Hiring may have been disrupted by Hurricane Beryl, which delivered a blow to the economy of Texas last month, some analysts believe. Julia Pollak, chief economist at ZipRecruiter, told AP that employers could have cut worker hours and made temporary layoffs, suggesting that they are nevertheless optimistic that a rate cut could help turn things around.
Friday’s report has added further fuel to mounting concerns that the Federal Reserve has waited too long to cut rates. On Wednesday, the Fed opted to keep its benchmark interest rate in the 5.25%-5.50% range, where it has been for more than a year.
Fed Chair Jay Powell indicated that the first rate cut of the post-pandemic era could come in September. Economists polled by Reuters are also expecting rate cuts in November and December.
