Employers added 187,000 jobs in July and the nation’s unemployment rate dipped to 3.5%, according to the latest data released Friday by the U.S. Bureau of Labor Statistics.
Hiring remained strong, but in line with June’s downwardly revised figure of 185,000 jobs. The pace of hiring in July was slower than the 12-month average of 312,000. This sign that the economy is slowing may impact the Federal Reserve Board’s decision on whether to raise interest rates again in September as part of its strategy to cool down the economy and reduce inflation.
Noteworthy job gains during July occurred in healthcare (+63,000), social assistance (+24,000), financial activities, (+19,000) and wholesale trade (+18,000). Construction hiring continued to trend up in July (+19,000), but hiring was at a slower pace than the 26,000 jobs gained in June. Nevertheless, the July increase in construction jobs was still in line with the average monthly gain of 17,000 in the prior 12 months.
There was little change in other major industries, including manufacturing; retail trade; transportation and
warehousing; information; and government. Employment in the leisure and hospitality industry remains below its pre-pandemic February 2020 level by 352,000 jobs (-2.1%).
Employment in temporary help services continued to trend down over the month (-22,000) and is down by 205,000 since its peak in March 2022.
The unemployment rate, now at 3.5%, dipped 0.1 percentage point from the 3.6% jobless rate recorded in June. The unemployment rate has ranged from 3.4% to 3.7% since March 2022.
The labor force participation rate – the proportion of U.S. working-age population with jobs or actively searching for work – was 62.6% for the fifth consecutive month. The employment-population ratio measuring only workers with jobs was 60.4% in July, up slightly from June’s 60.3% rate.
Employers raised pay at the same rate as June, with average hourly earnings growing 4.4% in July compared to a year earlier. This is a slower pace than last year, but well above the pre-pandemic pace. The average nonfarm wage is now $33.74 per hour, compared to $32.22 in July of 2022.
The complete Unemployment Situation Report can be found here.
