U.S. job growth slowed far more than expected in July and the unemployment rate rose, the Labor Department reported on Friday.
Nonfarm payrolls rose by just 114,000 this month, down from June’s downward revision of 179,000 and below Dow Jones’ forecast of 185,000. The unemployment rate rose slightly to 4.3%, the highest level since October 2021.
Average hourly earnings, a closely watched barometer of inflation, grew 0.2% this month and 3.6% year-over-year. Both figures were lower than their respective forecasts of 0.3% and 3.7%.
Stock futures fell further after the report, while bond yields plunged.
The report adds to recent mixed signals about the economy and nervousness in financial markets about how the Fed will respond. The labor market, long a pillar of the economy’s strength, has shown some signs of trouble recently, with job growth in July falling well below the 12-month average of 215,000.
From an industry perspective, health care once again led job creation, adding 55,000 jobs. Other industries with larger gains included construction (25,000), government (17,000) and transportation and warehousing (14,000). The leisure and hospitality industry has been another major growth area over the past few years, adding 23,000 people.
The information services industry lost RMB 20,000.
While the establishment survey used for the overall employment data was dismal, the household survey was even more dismal, with an increase of just 67,000, while the number of unemployed people increased by 352,000. The labor force also shrank by 214,000 people, although the participation rate of the working-age population actually edged up to 62.7%.
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