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.
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 data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages,” the BLS said in the report, though it cautioned that the Covid impact is still skewing data and wage gains are uneven across industries.
Markets reacted positively to the report, with the Dow and S&P 500 hitting new record highs at the open Friday morning.
As has been the case for the past several months, leisure and hospitality led job creation, adding 380,000 positions, of which 253,000 came in bars and restaurants. The sector took the hardest hit during the pandemic but has been showing consistent gains during the economic reopening.
Education also showed strong gains, with 261,000 new hires. Professional and business services contributed 60,000, and transportation and warehousing added 50,000. Sectors also showing increases were other services (39,000), health care (37,000), manufacturing (27,000), information (24,000), financial activities (22,000) and mining (7,000). Retail posted a loss of 6,000 while construction and wholesale trade were flat.
The unemployment rate has tumbled from the 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.
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,” said Ryan Detrick, chief market strategist for LPL Financial. You can read more here.
As always, our team is watching all economic factors that affect our clients. July was one of the strongest months in real estate and we expect that fall will be extremely active. We are very optimistic about the future of our city!