The rise to 4.3% from the 4.1% recorded in June marks the fourth straight monthly increase
The US unemployment rate climbed for the fourth consecutive month in July, reaching 4.3% — up from 4.1% in June, according to the Bureau of Labor Statistics on Friday. This figure is the highest since the beginning of the pandemic.
The US economy added only 114,000 jobs last month, a significant decrease from the 206,000 jobs added in June and falling short of the 215,000 average monthly job growth over the past 12 months. Economists surveyed by Reuters had predicted an increase of 175,000 jobs.
The number of unemployed individuals across the US rose by 352,000 to 7.2 million, a considerable increase from the 5.9 million recorded a year ago when the unemployment rate was 3.5%.
While certain sectors, notably healthcare, experienced employment gains, the overall job growth continued to narrow. Only 49.6% of industries reported an increase in employment, a decline from 56.0% in June.
Average hourly earnings grew by 0.2% in July, following a 0.3% increase in the previous month. Over the 12 months ending in July, wages increased by 3.6%, representing the smallest year-over-year growth since May 2021 and placing wage growth just above the 3.0%-3.5% range considered consistent with the Federal Reserve’s 2% inflation target.
Some analysts believe Hurricane Beryl, which hit Texas last month, may have disrupted hiring. Julia Pollak, chief economist at ZipRecruiter, told the Associated Press that employers might have reduced worker hours and implemented temporary layoffs, suggesting their optimism that a rate cut could help improve the situation.
Friday’s report has further fueled growing concerns that the Federal Reserve has delayed rate cuts for too long. On Wednesday, the Fed chose to maintain its benchmark interest rate within the 5.25%-5.50% range, where it has remained for over a year.
Federal Reserve Chair Jay Powell hinted that the first rate cut since the pandemic could occur in September. Economists polled by Reuters also anticipate rate cuts in November and December.