U.S. Job Growth Falls Well Short Of Estimates In July, Unemployment Rate Rises

(RTTNews) - The Labor Department released a closely watched report on Friday showing employment in the U.S. increased by much less than expected in the month of July.

The report said non-farm payroll employment climbed by 114,000 jobs in July after jumping by a downwardly revised 179,000 jobs in June.

Economists had expected employment to rise by 175,000 jobs compared to the surge of 206,000 jobs originally reported for the previous month.

The weaker than expected job growth came as continued increases in employment in the healthcare, construction, and transportation and warehousing sectors was partly offset by a loss of information jobs.

The Labor Department also said the unemployment rate rose to 4.3 percent in July from 4.1 percent in June. Economists had expected the unemployment rate to remain unchanged.

With the unexpected increase, the unemployment rate reached its highest level since hitting 4.5 percent in October 2021.

The rise by the unemployment rate came as the labor force grew by 420,000 persons compared to the 67,000 person uptick by the household survey measure of employment.

"After this morning's jobs report, the Fed should have buyer's remorse about its decision to leave rates unchanged on Wednesday," said FHN Financial chief economist Chris Low. "The unemployment rate is now higher than the level the Fed considers consistent with full employment." "This is just one report, and it could have been affected by Hurricane Beryl despite the lack of overt evidence," he added. "But this release is not anomalous. The pace of labor market cooling has accelerated since March."

Meanwhile, the report said average hourly employee earnings edged up $0.08 or 0.2 percent to $35.07, while the annual rate of wage growth slowed to 3.6 percent in July from 3.8 percent in June.