Just days after Fed Chairman Jerome Powell confirmed that a softening job market could help propel an interest rate cut at the monetary body’s next meeting in September, a new federal report shows unemployment swelled to 4.3% in July and job growth showed significant slowing.
U.S. businesses added 114,000 new, non-farm payroll jobs in July according to a Friday report from the U.S. Department of Labor, falling far short of the 175,000 expected by many economists and trailing well behind the 217,000 new jobs per month average over the past year. The annual unemployment rate hit its highest level since October 2021 in July, inching up from June’s 4.1%. The Labor Department’s July Employment Situation Summary found the number of unemployed people increased by 352,000 to 7.2 million last month. The new data reflects a significant rise in U.S. unemployment from 12 months ago when the jobless rate was 3.5% and the number of unemployed people numbered 5.9 million.
“Temperatures might be hot around the country, but there’s no summer heatwave for the job market,” Becky Frankiewicz, president of the ManpowerGroup employment agency, told CNBC . “With across-the-board cooling, we have lost most of the gains we saw from the first quarter of the year.”