Employers added 528,000 jobs in July, as the hot labor market powers on

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28. Marketwatch

Jobs shocker: U.S. adds 528,000 jobs in July and unemployment falls to pre-pandemic levels

Last Updated: Aug. 5, 2022 at 8:59 a.m. ET
First Published: Aug. 5, 2022 at 8:12 a.m. ET

By Jeffry Bartash




The numbers The U.S. added a surprisingly strong 528,000 new jobs in July and the unemployment rate fell to pre-pandemic levels in a muscle-flexing display for the economy, but the robust report could add to inflation worries and push interest rates even higher. Economists polled by The Wall Street Journal had forecast 258,000 new jobs. Hiring was broad based. Every major sector increased employment. And the number of people working finally returned to February 2020 levels.

The unemployment rate, meanwhile, slipped to 3.5% from 3.6%, the government said Friday, matching the lowest level since the late 1960s. In premarket action, U.S. stocks turned lower. The large increase in hiring contradicts another key government report that suggests the U.S. teeters on recession, but it won’t be viewed in a positive light by the Federal Reserve.

The Fed is sharply raising U.S. interest rates to try to reverse the worst outbreak of inflation in almost 41 years. Higher rates slow the economy by raising the cost of borrowing for businesses and consumers. The shockingly robust July jobs report could persuade the Fed that even tougher medicine is needed. The central bank worries the tight labor market is driving wages sharply higher and making it harder to get inflation under control.

Although some businesses have cut back on hiring or even resorted to layoffs, many companies are still filling open jobs. Most are offering higher pay for new workers or raising wages for current employees to keep them from leaving. Hourly pay jumped 0.5% in July to $32.27. The increase in pay over the past year was flat at 5.2%, but it’s still one of the fastest increase since the early 1980s.

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https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-july-11659701564?mod=bnbh