In a sign of continued strength in the U.S. labor market, employers added 528,000 jobs to the economy in July, as reported speak Bureau of Labor Statistics (BLS) in his last non-agricultural payroll report. Payroll growth more than doubled analysts’ expectations of 250,000.
With last month’s gains, the labor market surpassed its previous high of 152.5 million payrolls set in February 2020, effectively recouping losses suffered during the pandemic. recession. During this time, the unemployment rate unexpectedly fell to 3.5%, matching the pre-pandemic rate of January and February 2020, its lowest rate since 1969.
Key points to remember
- The U.S. economy added 528,000 jobs in July, more than double projections for a gain of 250,000
- The labor market has fully recovered all job losses suffered during the onset of the COVID-19 pandemic
- The unemployment rate fell to 3.5%, matching the pre-pandemic rate in January and February 2020
- Job growth was broad-based across all sectors and industries, led by gains in leisure and hospitality, professional and business services, and healthcare
- Nominal wages rose 0.5% in July, after rising 0.4% in June, and 5.2% year-on-year
Generalized gains in all sectors
Payroll gains were widespread across all sectors and industries, with a particularly strong gain of 96,000 in the leisure and hospitality sector, driven by continued growth in food services and drinking places at 74 000 posts. Professional and business services added 89,000 jobs, followed by health care with 69,600. Civil service employment is on the rise again, gaining 57,000 jobs.
Since hitting a pandemic-era low in April 2020, nonfarm payrolls have increased by 22 million over the past 27 months. Private sector the payroll is now 629,000 positions above its pre-pandemic peak in February 2020. The public sector or government payroll has not yet fully recovered and is 597,000 positions below its pre-pandemic peak.
Decline in labor market participation
The activity rate, which tracks the percentage of the adult population that is either employed or looking for work, edged down a tenth of a percentage point to 62.1%. Meanwhile, the employment-to-population ratio remained unchanged at 60%. Labor force participation remains significantly below its pre-pandemic level of 63.4% recorded in February 2020, as the onset of the pandemic caused large numbers of workers to be permanently out of the labor force .
Acceleration of nominal wage gains
Nominal wages rose 0.5% in July, following a 0.4% rise in June, with the average hourly wage of private sector workers rising to $32.27. Year-over-year wages rose 5.2%, matching the rate of increase in June. However, wage growth remained well below the annual inflation rate of 9.1%, indicating a decline in Real wages and a new loss of consumption purchasing power.