Labor Department hiring surges in July, U.S. employers create 528,000 jobs last month Say Friday. That was well ahead of economists’ expectations for the 250,000 jobs added during the period.It’s also a leap from last month, when businesses increased That’s despite inflation hitting its highest level in 40 years.
The unemployment rate fell to 3.5% from 3.6% in June, the lowest level since February 2020, just before the outbreak of the COVID-19 pandemic in the U.S. The economy added about 450,000 a month ahead of the latest jobs report. jobs.
Both total nonfarm payrolls and the unemployment rate have returned to pre-pandemic levels.
Jobs data underscores economy’s resilience for two straight quarters, which is considered a sign of a recession. Despite slowing economic growth, hiring remains strong as businesses continue to add jobs and retain existing employees as consumer demand is strong.
“This is a job market that’s not going to quit. It’s challenging the rules of the economy,” Becky Frankiewicz, chief commercial officer at recruitment firm ManpowerGroup, said in an email after the data was released. “Economic indicators are signaling caution, but U.S. employers are signaling confidence.”
Why stocks may fall
Strong job growth last month could weigh on stocks in the near term, as it suggests the Federal Reserve can continue to raise interest rates sharply to keep inflation in check. S&P 500 futures fell 0.7% ahead of Friday’s open, according to FactSet.
Central banks have been raising interest rates to curb inflation, which is at its hottest level in four years. With the Federal Reserve raising interest rates four times so far this year, borrowing costs have become increasingly expensive for consumers and businesses. Economists had expected this to cause businesses to quit hiring, but July data showed employers were continuing to add workers.
Adam Crisafulli, a Wall Street analyst at Vital Knowledge, said in a client note that the July jobs data “reflects that the economy is operating at a very strong level, clearly not in a recession, and can withstand austerity. monetary policy.”
While the labor market is strong, other indicators show the economy is slowing as the Fed hits the brakes. Some analysts point out that job growth alone is not a reliable indicator of a downturn, noting that hiring tends to remain strong in the early stages of a recession.
For example, in the three months before the recession triggered by the housing crash that began in December 2007, the Labor Department’s monthly employment survey showed the economy was adding nearly 300,000 jobs a month, according to Societe Generale Cross Asset Research.