America’s labour market rebounded strongly in July, significantly surpassing expectations as hiring rose by the sharpest pace in almost a year.
According to latest data published by the Bureau of Labour Statistics, nonfarm payrolls rose 943,000 in July, causing the unemployment rate to fall to 5.4%. Economists polled by Bloomberg called for an increase of 870,000 jobs, and an unemployment rate of 5.7%. Despite the optimistic gains, however, payrolls are still 5.7 million below pre-pandemic levels, suggesting that the rising risk of the delta variant may be threatening to undermine strong job growth.
The number of Americans considered to be unemployed for 27 weeks or more fell by 560,000 last month, marking the sharpest decline on record. Conversely, the labour force participation rate climbed to a modest 61.7%— the highest level since March 2020. Following the the latest figures, the yield on the 10-year Treasury advanced higher, as investors brace for a potential pullback in bond purchases by the Federal Reserve.
Previously, Fed Chair Jerome Powell had insisted that America’s labour market still had a long ways to go before the central bank would even consider tapering its asset purchases. However, the payroll print marks a significant increase in jobs that surpassed expectations, suggesting that a tapering may need to come a lot sooner than anticipated.
Information for this briefing was found via the BLS and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.