The U.S. added only 187,000 jobs in July, less than economists expected, as the unemployment rate fell to 3.5%, according to Bureau of Labor Statistics (BLS) data released Friday.
Economists had anticipated the country would add 200,000 jobs in July compared to 209,000 jobs in June and that unemployment would remain the same at 3.6%, according to Reuters. The U.S. economy grew 2.4% for the year in the second quarter of 2023, outdoing expectations of 2%.
“A continued cooling of both job growth and real wage growth will weigh further on some forward-looking indicators, souring the broader economic outlook,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “Additionally, labor force growth has severely lagged the pre-pandemic trend, which is artificially suppressing the unemployment rate while conversely inflating the labor force participation rate. The jobs market is not as healthy as the headline numbers are making it appear.”
The BLS release is in contrast to private payroll firm ADP, which released a report showing 324,000 private sector jobs were added, with leisure and hospitality driving growth while manufacturing dropped for the fifth straight month. ADP reported that 497,000 new private employee jobs were added in June, while the BLS only reported 209,000 total new jobs.
Federal Reserve Chair Jerome Powell announced another rate hike at the July Federal Open Market Committee meeting in an effort to cool the market and bring down inflation to the 2% target rate. The rate currently stands between the range of 5.25% and 5.50%, with the hike being the eleventh since March 2022.
Inflation fell to 3.0% in June, down from 4.0% in May but still well above the 2% target rate. Core CPI, which excludes energy and food, was 4.8% year-over-year, compared to 5.3% in May.
Powell noted at a press conference following the rate hike announcement that he does not expect the inflation rate to return to the normal level of 2% until 2025.
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