U.S. job growth in July slowed to an unexpected 114,000 jobs added in the wake of interest rate hikes by the Federal Reserve in 2022 and 2023.
Job growth declined from the 179,000 jobs added in June, according to the report released Friday by the Department of Labor. Most economists polled by Reuters projected 175,000 jobs would be added in July.
The unemployment rate jumped to 4.3% in July, the fourth consecutive month the rate has increased and the highest since October 2021. The July bounce crossed a threshold that has historically indicates the United States is in a recession, but economists say the measure is not as reliable in the current unpredictable post-pandemic economy.
Average hourly wages rose 3.6% from July 2023, the smallest year-over-year gain since May 2021 and another indication the labor market is cooling.
Healthcare and social assistance firms accounted for most of the hiring last month, adding 64,000 jobs. Restaurants, hotels and bars added almost 26,000 jobs.
In a statement, President Joe Biden said “Today’s report shows employment is growing more gradually at a time when inflation has declined significantly.”
“Business investment remains strong thanks in part to our investing in America agenda, which is creating good-paying jobs in communities that have been left behind. There’s more to do, but we’re making progress growing the economy from the middle out and the bottom up,” Biden said.
Some information for this report was provided by The Associated Press and Reuters.