ZINGER KEY POINTS
- Nonfarm payrolls missed expectations last month, rising by 187,000 versus the expected 200,000.
- The unemployment rate inched lower to 3.5%, while wages increased more than expected.
The U.S. labor market continues to show strength and resilience, as highlighted by the July jobs report released Friday.
Despite soaring interest rates reaching levels not seen in over 20 years, American businesses persisted in increasing their workforce in July, albeit at a slower rate than projected.
The unemployment rate dropped to 3.5%, surpassing expectations and remaining near historic lows. Moreover, wage growth outpaced predictions, instilling confidence in future consumer spending. However, concerns about mounting price pressures and potential interest rate hikes loom over the economic horizon.
Key Highlights From July Jobs Data
- U.S. private businesses added 189,000 nonfarm payrolls (NFPs) in July, missing economist expectations of 200,000.
- The total nonfarm payroll employment for June was revised lower from 209,000 to 185,000.
- Within different industries, health care added 63,000 jobs, while financial activities added 19,000. Employment in leisure and hospitality was little changed at 17,000.
- The unemployment rate fell from 3.6% to 3.5%, inching closer to multidecade lows. In July, the number of unemployed individuals fell to 5.8 million, remaining well below the number of available job openings at 9.6 million, indicating a tight labor market.
- Additionally, average hourly earnings for U.S. private nonfarm payrolls increased by 14 cents, or 0.4%, reaching $33.74 in July 2023. in annual terms, wages rose 4.4%, beating expectations of 4.2%.
Market Reactions
Following the release of the July jobs report, traders slightly adjusted their interest-rate forecasts, raising the probability of a rate increase in September from 18% to 20%, according to CME Group.
Futures on the S&P 500 index were 0.1% higher ahead of the opening bell.
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Originally Posted August 4, 2023 – July’s Mixed Jobs Report: Payrolls Miss Estimates, Unemployment Rate Dips, Wages Surpass Expectations
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