WASHINGTON (AP) – United States (US) employers added 187,000 jobs last month as the labour market slowed but continued to show strength in the face of higher interest rates.
The unemployment rate dipped to 3.5 per cent.
Hiring has remained solid, raising hopes that the US can avoid a long-expected recession.
The American economy has generated at least 200,000 new jobs for a record 30 straight months. And the streak likely continued into July. But just barely.
The Labour Department’s latest jobs report, out on yesterday showed that employers tacked on exactly 200,000 jobs last month, according to a survey of forecasters by the data firm FactSet.
That would be fewest since December 2020 – but still a healthy number and a sign that the US labour market remains sturdy despite markedly higher interest rates.
In another sign of strength, the unemployment rate is expected to stay at 3.6 per cent, not far off a half-century low.
The US economy and job market have repeatedly defied predictions of an impending recession.
Increasingly, economists are expressing confidence that inflation fighters at the Federal Reserve (Fed) can pull off a rare “soft landing’’ – raising interest rates just enough to rein in rising prices without tipping the world’s largest economy into recession.
Consumers are feeling sunnier too: The Conference Board, a business research group, said that its consumer confidence index last month hit the highest level in two years.
But the Fed rate hikes – 11 since March 2022 – have taken a toll. Hiring has averaged 278,000 jobs a month this year – strong by historic standards but down sharply from a record 606,000 a month in 2021 and from 399,000 last year as the US economy roared back from 2020’s brief but nasty pandemic recession.
There’s other evidence the job market, while still healthy, is losing momentum.
The Labour Department reported on Tuesday that job openings fell below 9.6 million in June, lowest in more than two years.
But, again, the numbers remain unusually robust: Monthly job openings never topped eight million before 2021.
The number of people quitting their jobs – a sign of confidence they can find something better elsewhere – also fell in June but remains above pre-pandemic levels.
The Fed wants to see hiring cool off. Strong demand for workers pushes up wages and can force companies to raise prices to make up for the higher costs.
One welcome sign from the Fed’s perspective: Americans are returning to the job market, making it easier for employers to find and keep workers without offering substantial pay increases.
The COVID-19 pandemic encouraged many older workers to retire ahead of schedule and kept others sidelined by health concerns and difficulty getting childcare.
