Unemployment Rate Rises In the US: In July, unemployment issues in the US recorded massive growth, and the job growth rate slowed down a lot. This shows that the Job sector is losing its strength and becoming weaker day by day.
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New jobs are still being added in America but not like the earlier pace.
Unemployment Rate Rises and Job Hiring Slowed Down Drastically In the US
On Friday, the Labor Department reported that job hiring in the USA was reduced to only 114,000 jobs last month, and the unemployment rate recorded a rise of 4.3% compared to last month.
However, employee’s hourly earnings increased by 3.6% compared to last year’s. This was more than the current pace of inflation but the gains were not more than compared to what was in May 2021.
Reports stated that a total of 29,000 jobs were reduced from the job count for May and June.
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The unemployment rate was higher, especially among those people who were looking for jobs. The rate of working-age people who were either working or in search of jobs went up from 62.6% in June to 62.7%.
After the unemployment data was released, the stock futures which were already trading low fell further. Treasury yields were down drastically after the reports and were weaker than what was expected.
As per the reports, in July around 55,000 jobs were specially added in the healthcare sector, 25,000 in construction and 23,000 new jobs in leisure and hospitality
However, the information sector lost around 20,000 jobs in July.
On Wednesday, Fed officials cleared the way for a September interest rate cut because of the positive inflation rates and to prevent unemployment rates.
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At a press conference, Jerome Powell who is the Chair of the Federal Reserve of the United States added, “I would not like to see material further cooling in the labor market.”
The reason behind the massive job growth rate in the US might be because of Hurricane Beryl which caused landfall in Texas on July 8. It was close to the beginning of the week that the Labor Department used to report on job growth.
After the storm, each week there was a noticeable rise in several beginning claims for jobless insurance in Texas.
On Friday, the labor department said that around 461,000 people weren’t able to do their jobs because of bad weather conditions in June and July. Around 37,000 people missed work on average because of bad weather conditions.
According to the reports, the unemployment rate has surged by 0.53 % to 4.13% compared to the three-month average low of 3.60% last year.
