by Lucia Mutikani
WASHINGTON (Reuters) – The U.S. economy added fewer jobs than expected in July, but rising wages and a falling jobless rate indicate labor market conditions remained tight.
The Labor Department on Friday announced 187,000 non-farm payrolls created last month after 185,000 (revised from 209,000) in June.
Economists polled by Reuters predicted an average of 200,000 job creations.
Businesses are retaining employees after struggling to find them during the COVID-19 pandemic, with employment in some sectors, such as leisure and hospitality, still below pre-health crisis levels.
Despite moderate employment growth, the labor market remains tight and the unemployment rate stands at 3.5%, after reaching 3.6% in June, thus returning to levels of more than 50 years ago. years.
This rate is well below the Fed’s latest median estimate of 4.1% for the fourth quarter of this year.
Wages continued to rise at a steady pace, by 0.4%, as in June, while the consensus was for an increase of 0.3%. Over one year, it shows an increase of 4.4%.
Year-on-year wage growth remains too high to be consistent with the Federal Reserve’s 2% inflation target. Price increases slowed sharply in June, the data showed.
Economists who have long predicted an economic slowdown in the fourth quarter are increasingly confident that the scenario of a soft-landing of the economy envisioned by the Fed is now possible.
The string of favorable inflation data has led many economists to believe that the Fed’s fastest rate hike cycle in more than 40 years is likely over.
(French version Laetitia Volga and Diana Mandiá, edited by Nicolas Delame)
Copyright © 2023 Thomson Reuters