The US labor market continues to ‘stretch muscle’: 528,000 jobs were created in July and unemployment fell to pre-pandemic levels – elEconomista

The US labor market remains robust. The employment report for July from the Bureau of Labor Statistics (BLS) released this Friday includes the creation of 528,000 new jobs during the past month. The figure far exceeds analysts’ expectations, who expected the number to drop to 250,000 from 398,000 jobs created in June (revised upwards from the first reading). The US economy, the largest in the world, has not created so many jobs in a month since last February, when the figure rose to 750,000. “Job growth was widespread” across all sectors, the BLS said in its statement. The leisure and hospitality sector were the sectors in which the most jobs were created in July, as well as professional and business services and health care. Consequently, both non-farm employment and the unemployment rate in the United States have returned to levels not seen since before the covid-19 pandemic. Put another way: all the jobs lost during the pandemic have been fully recovered. Long-term unemployment, also at pre-covid levels Specifically, unemployment in the US fell by one tenth in July compared to the previous month, to a record low of 3.5%, a level not seen since February 2020 The number of people without work in the North American power fell to 5.7 million. At the same time, both the labor force participation rate (at 62.1%) and the employment-to-population ratio (60%) remained at pre-pandemic levels, barely changing. Among the main groups of workers, “the unemployment rates of adult women (3.1%) and whites (3.1%) decreased in July”, highlights the BLS. In contrast, unemployment among adult men (3.2%), adolescents (11.5%), blacks (6%), Asians (2.6%) and Hispanics (3.9%) barely changed. As for long-term unemployment (those who have been unemployed for 27 weeks or more) it decreased by 269,000 people in July, to 1.1 million. A reference that has also returned to its pre-pandemic level. However, figures released yesterday by the US Department of Labor showed that initial jobless claims increased slightly over the last week of last month. An “incredibly strong” labor market gives the Fed’s ‘hawks’ more wings “The payroll figure [no agrícolas] The US growth has beaten consensus forecasts for the third time in a row,” notes James Knightley, an economist at ING Economics. “The July jobs report far exceeded expectations for job and wage growth, showing that despite Despite growing recession fears, the labor market remains incredibly strong,” say analysts at Oxford Economics. Friday’s BLS report shows median hourly earnings in July advanced 5.2% year-on-year and 0 .5% MoM (0.3% expected as prior month) to $32.27 “Labor market resilience provides Fed with both reason and space to focus on curbing inflation” This bodes well that personal income will continue to rise and support consumer spending. However, this jobs report also means that the Federal Reserve is far from finished” in tightening its monetary policy to curb wage inflation, explain Lydia Boussour and Kathy Bostjancic of Oxford Economics. to the Federal Reserve both the reason and the space to focus on curbing inflation”, underline these experts. Therefore, the latest references of the North American labor market fuel the expectation that the US central bank will continue to raise rates strongly. Last week it did so by 75 basis points, as in the previous meeting, but then it had been 28 years since the Fed carried out an increase in interest rates of that caliber.