In July, the U.S. economy added 187,000 jobs, slightly below expectations. However, the unemployment rate dropped to an impressive 3.5%. These job gains are on par with those seen in June, giving economists hope that the labor market can withstand the Federal Reserve’s interest rate hikes without a recession.
According to the Bureau of Labor Statistics, the largest job gains were in health care, social assistance, financial activities, and wholesale trade. However, the motion picture and recording industries experienced a decline in employment due to the WGA strike and the SAG-AFTRA walkout, which brought production to a standstill. Broadcasting, content providers, and publishing also saw a slight drop in jobs.
While the job market remains strong, there are still ongoing strikes, such as the WGA and SAG-AFTRA strikes. Acting Labor Secretary Julie Su explained that in a tight labor market, workers may resort to striking if their needs are not met at the bargaining table. This is part of the collective bargaining process that aims to resolve issues and build strength in industries for the long term.
Economist Mark Zandi praised the July jobs report, stating that it couldn’t have been much better. Job growth remains strong but is moderating, aligning with the Federal Reserve’s efforts to control inflation. Average hourly earnings on private, nonfarm payrolls also rose by 0.4 percent to $33.74, showing a 4.4 percent increase over the past year.
However, Harvard professor Jason Furman described the report as “mixed” in terms of taming inflation. While job growth is slowing and the unemployment rate remains neutral, wage growth has picked up.
It’s important to note that these figures are subject to revision in the coming months. In fact, the job numbers for June and May were revised downward by 49,000 jobs. This means that job growth in June was actually 185,000, and in May it was 281,000.
