The U.S. labor market added 943,000 jobs in July, and the unemployment rate fell to 5.4%, indicating that some Shortage of workers The factors hindering economic recovery have begun to ease.
The non-agricultural employment data released by the US Bureau of Labor Statistics on Friday was far higher than the 870,000 new jobs expected by economists, and exceeded the upwardly revised 938,000 jobs create In June. The unemployment rate fell from 5.9% in June and is at the lowest level since the pandemic began.
The increase in July is the largest increase since August 2020. Among them, the leisure and hotel industry is the most obvious. As restaurants and hotels raise wages and increase recruitment, the number of employed people has increased by 380,000. Since May, the average hourly wage of these workers has risen by 2.7%.
Local government work related to education has also seen a substantial increase, but the Bureau of Labor Statistics warns that the data will be distorted.
It said in the report: “The fluctuations in educators due to the pandemic have distorted the normal seasonal build-up and layoffs pattern, which may contribute to job growth in July.”
“If there is no earlier typical seasonal employment growth, fewer layoffs at the end of the school year, resulting in increased jobs after seasonal adjustments. These changes make it more challenging to discern current employment trends in these education industries.”
Excluding government jobs, the total number of private employment increased by 703,000 in July.
Wells Fargo senior economist Sarah House (Sarah House) said: “You have seen the labor market shift to a higher level this summer, and workers are beginning to return to the labor market.”
Policy makers are watching these data closely, and they are actively debating how much support the world’s largest economy needs to escape from the shock of Covid-19.
Economic growth has Rebound For the first time, U.S. output has returned to its pre-pandemic level. Consumer prices have also soared across the country, but the labor market has been slow to heal. Policymakers have cited childcare issues, concerns about Covid-19 infection, and increased unemployment benefits as factors preventing Americans from filling a record number of job vacancies.
Despite the increase in July, 5.7 million Americans are still unemployed compared to before the coronavirus outbreak in February 2020-House warned that the rapid spread of the Delta variant may further delay returning to work.
“We will still see the job market improve and workers come back, but it may not happen so quickly,” she said.
Despite employers’ efforts to attract workers, the labor force participation rate that tracks the number of Americans employed or looking for work has hardly changed in recent months. Some companies have increased wages, while others have provided further incentives.
The ratio in July was 61.7%, roughly the same as last month. Average hourly wages generally rose 0.4% from June and 4% year-on-year.
After stronger-than-expected data, the global government bond market continued to sell pressure. The US 10-year Treasury bond yield rose by 0.06 percentage points to 1.28%, while the UK and Continental European yields also rose.
Investors are paying particular attention to this month’s data because it is only a few weeks away from the Jackson Hole Central Bank’s annual meeting in Wyoming.
Strong employment reports may force U.S. Federal Reserve More serious consideration of reducing the $120 billion monthly bond purchase program-it said it will maintain this pace until it achieves “substantial further progress” in achieving the dual goals of maximum employment and an average of 2% core inflation.
In a letter on Thursday, Democratic Senator Joe Manchin from West Virginia urged Fed Chairman Jay Powell to “re-evaluate our country’s position immediately. [on] Monetary policy has begun to scale back the emergency stimulus response”, warning of overheating and high inflation without the need for adjustment.
But many Fed officials said that more progress is still needed in the labor market-TD Securities chief US macro strategist Jim O’Sullivan said that despite the strong rise in July, this threshold has not yet been fully reached.
“The data shows that meaningful’progress’ is still going on, but we still believe that Fed officials will need to experience a few more months of strengthening before they can achieve their’substantial further progress’ reduction criteria,” he added. “In addition, we don’t expect August data to be as strong as July data.”
Christopher Waller Say This week, the number of jobs in July and August increased by 800,000 to 1 million, which may lay the foundation for the September announcement, including Vice Chairman Richard Clarida and San Francisco Fed President Mary Daley Others, including (Mary Daly), have also recently proposed an end-if the economy improves as expected.
Powell did not provide a specific timetable, but he said Confidence At a press conference after the latest monetary policy meeting last week.
“We are clearly on the road to a very strong labor market, with high labor market participation, low unemployment and high employment rates. [and] Salaries are rising in every aspect,” he said.