Aug. 04, 2023 at 2:37 pm

Jobs report July:187,000 jobs added amid high rates, inflation

August 4, 2023no commentNo tags

Hiring roughly held steady in July as employers added 187,000 jobs despite high interest rates and inflation.

The unemployment rate, which is calculated from a separate survey of households, dipped from 3.6% to 3.5%, the Labor Department said Friday.

Economists surveyed by Bloomberg had estimated that 200,000 jobs were added last month.

Payroll gains for May and June were revised down by a total of 49,000, portraying a somewhat softer spring labor market than believed. The June rise in employment was downgraded to 185,000 from 209,000. As a result, June and July mark the first months of sub-200,000 job gains since December 2020.

What is the wage growth rate?

Average hourly earnings rose 14 cents to $33.74, keeping the yearly increase at 4.4%. Although pay increases have slowed from more than 5% last year, they’re still too high for a Federal Reserve seeking to push them down to 3.5% or lower to align with its 2% overall inflation target.

Kathy Bostjancic, Nationwide’s chief economist, says the report doesn’t tip the scales either way in the Fed’s decision whether to hold interest rates steady the rest of the year after a historic flurry of rate increases or approve an additional hike as soon as mid-September. The central bank, she says, will want to see the August jobs report and two more monthly inflation readings before making that call next month.

What industries are seeing job growth?

Private sector-job growth rebounded to 172,00 from a meager 128,000 in June while federal, state and local governments added 15,000 jobs, a slowdown from recent months.

In July, health care led the job gains with 63,000. Financial activities and construction both added 19,000. Leisure and hospitality added 21,000, its fourth straight month of relatively modest advances after driving job growth during the recovery from the pandemic as restaurants and bars ramped up hiring.

Professional and business services, another large sector that typically powers employment growth, shed 8,000 jobs.

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Jobs report July:187,000 jobs added amid high rates, inflation

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