News & Advice > Hiring

July Jobs Report: Payrolls Up by 187K, Below Expectations

July Jobs Report: Payrolls Up by 187K, Below Expectations

In July, payrolls in the U.S. increased by 187K jobs, slightly below the expected 200,000 estimated by Dow Jones. However, this still represented a modest gain compared to the revised 185,000 jobs added in June. The unemployment rate for July was 3.5%, lower than the anticipated 3.6%. Average hourly earnings increased by 0.4% for the month, contributing to a 4.4% annual increase, surpassing expectations.

The leading sectors for job creation were health care, social assistance, financial activities, and wholesale trade. Despite the slightly lower job growth, the labor market was described as solid, and the unemployment rate remained relatively low.

The labor force participation rate held steady at 62.6%, and a more comprehensive unemployment rate, including discouraged workers and part-time employees for economic reasons, dropped to 6.7%. The economy seemed resilient despite challenges, such as multiple Federal Reserve interest rate hikes aimed at controlling inflation.

Many experts predicted a recession, but economic growth remained positive due to consumer spending and a rebound in the services sector from pandemic-related disruptions. The gross domestic product (GDP) showed gains, averaging a 2.2% annualized rate for the year's first half. Market sentiment indicated that the Fed might not raise rates further in the near term, despite concerns about potential overtightening.

Although inflation had been a concern, recent data showed improvement, although the Fed's preferred measure still indicated higher prices than the central bank's target. The labor market picture didn't suggest an imminent dramatic slowdown, although there were signs of moderation. As recession fears abated, experts revised their views on the likelihood of an economic contraction.