The unemployment rate dipped to 3.5 percent, down from 3.6 percent in June. The labor force participation rate slipped to 62.1 percent
Average hourly earnings rose 0.5 percent month-over-month and 5.2 percent year-over-year. Both readings were higher than economists’ expectations of 0.3 percent and 4.9 percent, respectively. Average weekly hours also edged up to 34.6.
Employment growth was broad-based in July, led by notable gains in leisure and hospitality (96,000), professional and business services (89,000), and health care (70,000).
Government jobs swelled by 57,000, construction positions rose by 32,000, and manufacturing employment grew by 30,000. The retail sector added 22,000 jobs.
The number of people not in the labor force but wanting a job was unchanged at 5.9 million. The number of workers employed on a part-time basis for economic reasons surged by 303,000 to 3.9 million. The total number of multiple jobholders increased to 7.572 million, up from 7.013 million at the same time a year ago.
After the strong job numbers were published, the financial markets turned negative in pre-market trading.
The Dow Jones Industrial Average and the Nasdaq Composite Index shed about 100 points, while the S&P 500 slipped 0.7 percent. Investors think that the Federal Reserve will continue raising interest rates as the labor market endures the tightening cycle, observers note.
It could also reopen talks that the central bank could pull the trigger on a 100-basis-point rate hike, says Jan Szilagyi, CEO and co-founder of AI research firm Toggle.
“For the Fed, this means maintaining a very hawkish stance,” he said. “It’s a negative for the market because of the risk of more aggressive tightening, and the prospect that the Fed hasn’t caught up with inflation after all.”
By Andrew Moran