The U.S. economy tacked on fewer jobs than expected in July, while the number of positions added in the previous two months was revised lower, in a sign that a long-standing string of aggressive interest rate hikes by the Federal Reserve may be weighing on the labor market.
A total of 187,000 new non-farm positions were added during the month, a slight increase from a downwardly revised reading of 185,000 in June, data from the Bureau of Labor Statistics showed. Economists had seen the July number at 200,000.
The initial level for June had been 209,000. The May figure was also brought down to 281,000 from 306,000.
Growth in average hourly earnings was unchanged on a month-on-month basis at 0.4%, a faster rate than the 0.3% forecast. Annually, wages increased by 4.4%, outpacing projections of 4.2% and more than double the Fed’s target of 2%.
Meanwhile, the unemployment rate ticked down marginally to 3.5% from 3.6%, suggesting that the job market in the world’s largest economy remains robust.
Cooling labor demand has been a central objective of the Fed’s latest cycle of rate rises, with officials arguing that this trend, along with easing wage growth, could help corral elevated inflation.
Friday’s jobs report may factor into how the central bank evaluates its next decision on borrowing costs. The Fed raised rates by 25 basis points at its last meeting in July, a move that some observers believe could mark the end of its over-year-long tightening campaign. But it did not rule out further rate hikes if needed, noting that its upcoming moves will be “data-dependent.”
https://www.investing.com/news/economic-indicators/us-adds-187000-jobs-in-july-3145475
