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Aug. 4 (UPI) — According to the latest data released on Friday, the U.S. economy experienced a growth of 187,000 jobs in July, although the overall unemployment rate remained relatively unchanged.
The increase in total non-farm payroll employment was slightly lower than the average monthly gain of 312,000 over the past 12 months, as reported by the Bureau of Labor Statistics.
The Bureau of Labor Statistics also noted that the unemployment rate in July stayed at 3.5%, which falls within the range of 3.4% to 3.7% seen since March 2022. The number of unemployed individuals remained relatively stable at around 5.8 million people.
Employment figures serve as an important indicator for assessing the health of any major economy. In the case of the United States, a significant decline in employment, coupled with a downturn in gross domestic product, would suggest the emergence of recessionary pressures, especially as the Federal Reserve adopts aggressive rate hikes to combat inflation.
However, this scenario has not materialized thus far.
“The unemployment rate is 3.5%, marking a full year and a half below 4%,” stated President Joe Biden in a released statement. “This follows recent news that our economy continues to grow, while inflation has fallen by nearly two-thirds and is at its lowest level in more than two years.”
According to federal data published on Friday, the number of people who were laid off last month remained relatively stable compared to the previous month, as did the number of long-term unemployed individuals.
Wage growth, at an annual rate of 4.4%, is currently lagging behind core inflation, while the average work week was reduced to 34.3 hours in the previous month. The Federal Reserve Bank of Dallas recently reported a weakening in job prospects in response to a downturn in the manufacturing sector, which may already be experiencing a recession.
Regarding manufacturing, ING, an investment bank, stated that the employment outlook for this sector is the weakest it has been in three years, suggesting that “significant job losses” may be on the horizon.
This week, private payroll processor ADP announced that private employers added 324,000 jobs in July. Chief economist Nela Richardson remarked that the U.S. economy appeared to be performing better than expected, largely due to a “healthy labor market.” However, the rate of wage increase compared to the same period last year was the slowest since November 2021.
Although ING acknowledged that the latest jobs data conveyed a mixed outcome, the bank believes it should give the Federal Reserve reason to pause when it convenes next month.
“A mixed outcome, which doesn’t rule out further rate hikes from the Federal Reserve, but doesn’t give the central bank the all clear on inflation risks either,” wrote James Knightly, Chief International Economist at ING. “Tighter monetary conditions will increasingly weigh on job creation though.”
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