Economy News

U.S. employment up 950,000, wages rose


Although the Delta mutation of the highly contagious Covid-19 has spread throughout the country, the July employment trend showed solid growth for the U.S. economy. In addition, it confirmed that the economy is not so overheated that the Federal Reserve needs to advance its rate hike clock.

us employment
According to foreign media outlets such as the Financial Times (FT) and CNBC, the July employment trend released by the U.S. Department of Labor on the 6th (local time) was the optimal combination desired by the financial market.

A total of 943,000 new jobs were created in July, the most since August of last year, and the unemployment rate declined to 5.4% from 5.9% in June.

It was higher than the 870,000 economists had predicted, as well as the revised 938,000 jobs figure for July.

In addition, the unemployment rate fell by 0.5 percentage points in spite of the increase in the labor force participation rate, indicating the U.S. economy continued to grow strongly despite the spread of the delta shift.

July’s labor force participation rate was 61.7 percent, the highest level since March of last year, when the pandemic began.

Employment has also increased, and the unemployment rate has dropped, as more people are willing to work.

Wages have also increased.

Workers’ average hourly wages increased by 0.4 percent from the previous month and by 4 percent from the same month last year, higher than expected.

While the U.S. economy continues to grow strongly amid spreading delta shifts, jobs have exceeded market expectations, easing concerns about an economic slowdown, while wage growth, which can result in real inflation, is overheating. The Fed’s austerity timetable was not at risk of being advanced.

LPL Financial’s Ryan Detrick, head of market strategy, said the Fed shouldn’t taper its bond purchases right away. The Fed is expected to raise interest rates in 2023 as a result of tapering.

“The jobs data reaffirmed that the U.S. economy is prospering with incredible tenacity,” said Detrick.

Meanwhile, U.S. job growth last month was led by the leisure and hospitality industry, which has been the hardest hit by the pandemic.

380,000 new jobs were created in this sector, and wages increased rapidly.

253,000 new jobs were created in bars and restaurants. As the business normalized in the context of expanded vaccination, bars that had been closed due to the pandemic and restaurants that had been closed indoors experienced rapid job growth.

Leisure and hospitality wages rose 1.2 percent month-over-month and 3.1 percent year-over-year.

Stocks in the U.S. stock market shifted away from large technology stocks to cyclicals.

The Dow Jones Industrial Average, dominated by cyclical stocks, rose 0.4 percent, while the Nasdaq, which includes technology stocks, fell 0.4 percent.

For MetaNews.


Jonathan Hobbs

Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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