Payrolls increase 943,000 in July as unemployment rate slides to 5.4%

Hiring rose in July at its fastest pace in nearly a year despite fears over Covid-19′s delta variant and as companies struggled with a tight labor supply, the Labor Department reported Friday. Nonfarm payrolls increased by 943,000 for the month while the unemployment rate dropped to 5.4%, according to the department’s Bureau of Labor Statistics. The payroll increase was the best since August 2020.

Economists surveyed by Dow Jones had been looking for 845,000 new jobs and a headline unemployment rate of 5.7%. However, estimates were diverse amid conflicting headwinds and tailwinds and an uncertain path ahead for the economy. Average hourly earnings also increased more than expected, rising 0.4% for the month and are up 4% from the same period a year ago, at a time when concerns are increasing about persistent inflationary pressures.

The drop in the headline unemployment rate looked even stronger considering that the labor force participation rate ticked up to 61.7%, tied for the highest level since the pandemic hit in March 2020. A separate calculation that includes discouraged workers and those holding jobs part-time for economic reasons fell even further, to 9.2% from 9.8% in June.

Job placement site Indeed estimated there were 9.8 million job openings as of July 16, far more than the 8.7 million considered unemployed. In a survey of 5,000 job seekers, however, the amount of those citing health concerns as a reason for not looking for a job declined, with a growing number citing a lack of need due to a financial cushion as the top response.

The unemployment rate has tumbled from pandemic high of 14.8% but remains well above the 3.5% before the crisis. Federal Reserve policymakers have vowed to keep ultra-easy monetary policy in place until they see stronger signs of full employment, though Democratic Sen. Joe Manchin on Thursday criticized the central bank, saying it was risking runaway inflation in its jobs quest.

Payrolls increase 943,000 in July as unemployment rate slides to 5.4%, CNBC, Aug 6