The United States economy has now bounced back from the massive job losses during the COVID-19 pandemic following a gain of 528,000 jobs in July, based on data released Friday by the Bureau of Labor Statistics (BLS).
Refinitiv reported that the enormous monthly gain was more than twice the 250,000 forecast by economists.
After being constant at 3.6% for the previous four months, the jobless rate decreased slightly to 3.5%. The unemployment rate in July was equal to the 50-year low recorded in February 2020.
Thousands of US Jobs Were Generated
The employment snapshot released on Friday represents the highest monthly gain since the economy generated 714,000 jobs in February and the 19th consecutive month of job creation. According to CNN, the date from BLS data, the number of jobs added in July exceeded the previous four months' average monthly growth of 388,000 job positions.
All industries saw increases in employment, with the leisure and hospitality industries posting some of the significant increases. The BLS reports that employment in the essential service sector is still more than 1 million jobs below its pre-pandemic level.
From 62.2% in June, the labor force participation rate slightly decreased to 62.1%. The average hourly wage increased by 0.5 % from the previous month and has grown by 5.2% in the last 12 months, per Reuters.
The labor market was projected to see some softening as it neared regaining the more than 20 million jobs lost due to the epidemic, and also represented a larger downturn in economic activity, economists say.
Before the release of the report on Friday, which also contained 28,000 upward revisions for the previous two months, the country had around 524,000 fewer jobs than it would have had in February 2020.
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The US Still Not in a Recession
Mark Hamrick, a senior economic analyst at Bankrate, stated that despite the two consecutive quarters of decline in GDP in the initial half of the year, "these robust job market numbers strongly argue against recession talk."
He also noted that when combined with the most recent data showing that there are still many more job opportunities than job seekers, The number might put pressure on the Federal Reserve to keep up its recent string of aggressive rate hikes.
With a 9.1 % increase in the consumer price index in June, inflation continued to soar. However, experts believe that both inflation and employment growth have peaked.
According to CNBC, Fed Chair Jerome Powell has cited the robust job market as one reason he does not believe the economy is currently in a recession despite two successive quarters of negative gross domestic product (GDP).
Normally, two consecutive quarters of GDP decline, together with other indications like rising unemployment, could signal a recession, but for the time being, the economy is only considered to be in a technical recession.
Before determining how much to raise interest rates at its September meeting, the Fed will consider two reports, including this one on employment. Some economists predict that authorities will scale down their rate hikes and increase rates by just 0.5 percentage points as opposed to the 3.25 percentage points they increased rates by in both June and July.
