Payrolls growth slowed sharply to 114,000 in July; unemployment rate rise to 4.3%

August 02, 2024 10:36 PM AEST | By Investing
 Payrolls growth slowed sharply to 114,000 in July; unemployment rate rise to 4.3%

Investing.com -- The U.S. economy added significantly fewer jobs than anticipated in July, in another sign of a cooling in labor demand in the world's largest economy.

Nonfarm payrolls came in at 114,000 last month, down from a revised 179,000 in June, according to Labor Department data on Friday. Economists had seen the July number at 177,000.

The June reading was revised down heavily from an initial mark of 206,000.

Employment continued to trend up in health care, in construction, and in transportation and warehousing, while information lost jobs.

Meanwhile, the unemployment rate rose to 4.3%, up from 4.1% in June, climbing in each of the past three months. Month-on-month average hourly wage growth came in at 0.2%, below the expected 0.3%.

Data released earlier this week showed that U.S. job openings fell modestly in June, while new applications for unemployment benefits increased to an 11-month high last week.

The Federal Reserve kept its benchmark overnight interest rate in the 5.25%-5.50% range on Wednesday, where it has been since last July, but also opened the door to reducing borrowing costs as soon as its next meeting in September.

In the accompanying statement the Fed softened the description of inflation and said the risks to employment were now on a par with those of rising prices.

A cooling labor market will provide the Federal Reserve with more ammunition to cut interest rates from more than two-decade highs, potentially at its September meeting.

This article first appeared in Investing.com


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