More Americans were hired than expected last month because various states ended extended unemployment benefits before the September expiration. On Friday, the US Department of Labor said the nonfarm payrolls increased by 943,000 workers in July and the unemployment rate fell to 5.4%. Analysts are expecting 870,000 jobs gained and the unemployment rate to fall to 5.7% from 5.9%. However, June’s reading was revised higher by 88,000 jobs to 938,000. The chief market strategist at LPL Financial said, “Although there have been some cracks in the armor, today’s jobs number showed that once again our economy is incredibly resilient and moving forward”. Notable job gains +380,000, in leisure and hospitality, which saw two-thirds of the jobs gained in food services and drinking places.
Public and private education gained +261,000 and professional and business services +60,000. Transportation and warehousing also offered +50,000 jobs to Americans. But construction and wholesale trade showed a little amount of change. The jobs gains happened as 3 additional states ended the supplemental $300 per week in unemployment benefits. The 4th state, Maryland, was scheduled to end the benefits but a Baltimore judge blocked the state from doing so. The labor force participation rate was little changed at 61.7%. The rate has held between 61.4% and 61.7% since June 2020. Average hourly earnings rose 0.4% month over month and 4% annually. Most economists expected respective increases of 0.3% and 3.8%. The US economy has gained 16.7 million jobs since April 2020.
Moreover, the US economy continues to recover from its Covid-19-induced slowdown. Economists have started to question the need for the emergency measures put in place during the early days of the pandemic. The Fed slashed interest rates to near zero and has been buying US Treasuries and other assets at a pace of $120 billion per month. The US Central Bank said that it would need to see substantial further progress before beginning the tapering process. after its most recent meeting, US Federal Reserve Board members Richard Clarida and Christoper Waller delivered comments. They indicated a run of strong jobs reports would be evidence of such progress.