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The workforce rose by 528,000 in July, much better than expected, a sign of strength for the job market

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July hiring was far better than expected, defying signs the economic recovery is losing steam, the Bureau of Labor Statistics reported on Friday.

Nonfarm payrolls rose by 528,000 this month and the unemployment rate was 3.5%, slightly beating Dow Jones estimates of 258,000 and 3.6% respectively.

Wage growth also surged, with average hourly wages up 0.5% for the month and up 5.2% compared to the same time a year ago. These numbers fuel an inflationary picture that already shows consumer prices to have risen at their fastest pace since the early 1980s. The Dow Jones estimate called for a 0.3% monthly gain and a 4.9% annual increase.

Markets initially reacted negatively to the report, with Dow Jones futures down more than 200 points.

Leisure and hospitality led with 96,000 job gains, followed by professional and business services with 89,000. Health care added 70,000 and government payrolls grew by 57,000. Manufacturing industries also posted solid gains, with construction up 32k and manufacturing up 30k.

Despite bearish expectations, July gains were the best since February and well above the average job gain of 388k over the last four months. The BLS release noted that total nonfarm payrolls have risen by 22 million since the April 2020 low, when most of the US economy was shut down to deal with the Covid pandemic.

The bureau noted that private sector payrolls are now above February 2020 levels just ahead of the pandemic declaration, although jobs in the state are still lagging behind.

The unemployment rate fell, reflecting both strong job creation and an activity rate that fell 0.1 percentage point to 62.1%, the lowest level for the year.

Economists expect job creation to slow as the Federal Reserve hikes interest rates to cool inflation, which is at its highest level in more than 40 years.

The strong employment number coupled with higher than expected payroll numbers led to a shift in expectations for September’s expected rate hike. Traders are now pricing in a higher probability of a 0.75 percentage point hike at the next meeting, which would be the third straight hike of this magnitude.

https://www.nbcnews.com/business/economy/payrolls-increased-528000-july-much-better-expected-sign-strength-jobs-rcna41708 The workforce rose by 528,000 in July, much better than expected, a sign of strength for the job market

Fry Electronics Team

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