Employers Fall Short of Expected Job Creation Levels

US employers added 187,000 jobs last month, which was lower than anticipated. This can be attributed to the lingering impact of higher interest rates on the economy. However, despite this, the unemployment rate decreased to 3.5%, indicating that the job market remains resilient (AP). Comparatively, hiring in July increased from 185,000 in June, although the figure for June was revised downward from the initially reported 209,000 by the Labor Department. Economists had predicted the addition of 200,000 new jobs in July. It is worth noting that considering the Federal Reserve’s 11 benchmark interest rate increases since March 2022, last month’s hiring remained solid.

Regarding the Fed’s fight against inflation, there is positive news as more Americans entered the job market in July. This eases the pressure on employers to raise wages in order to attract and retain staff. However, as CNBC points out, there is a potentially concerning aspect of the report for the Fed: average hourly wages rose more than expected in July, showing a 0.4% increase for the month and a 4.4% increase on an annual basis. This upward trend indicates the continuation of inflation.

There is additional evidence suggesting a slowdown in the job market’s momentum, although it remains healthy. The Labor Department reported that job openings in June fell below 9.6 million, the lowest level in over two years. It is worth noting, however, that the numbers are still significantly higher than before 2021 when monthly job openings never exceeded 8 million. The number of people quitting their jobs, which is an indicator of confidence in finding better opportunities elsewhere, also decreased in June but remains higher than pre-pandemic levels (Read more unemployment stories.).