U.S. job growth accelerated in July across nearly all industries, restoring nationwide employment to its prepandemic level, despite widespread expectations of a slowdown as the Federal Reserve raises interest rates to fight inflation.
Employers added 528,000 jobs on a seasonally adjusted basis, the Labor Department said on Friday, more than doubling what forecasters had projected. The unemployment rate ticked down to 3.5 percent, equaling the figure in February 2020, which was a 50-year low.
The robust job growth is welcome news for the Biden administration in a year when red-hot inflation and fears of recession have been recurring economic themes. “Today’s jobs report shows we are making significant progress for working families,” President Biden declared.
broad industry to lose jobs in July was auto manufacturing, which shed about 2,200 as companies continued to struggle to obtain the parts necessary to produce finished vehicles. The public sector added 57,000 employees, particularly teachers, but remained 2.6 percent below its prepandemic level.
In crucial industries like technology, if some employers begin layoffs, those workers are likely to be absorbed by companies that would have liked to staff up but couldn’t find people. And for many kinds of businesses, if orders slow down more broadly, enough had built up to bolster payrolls into autumn.
For example, with mortgage rates rising and new housing starts and permits beginning to fall, jobs in residential construction would be expected to decline. Nevertheless, the construction industry added 32,000 jobs in July.
27 weeks or more sank to 1.1 million in July, while the share of people quitting their jobs has been steady or falling since February. Small businesses have reported that while hiring remains a top concern, availability of workers has improved slightly in recent months.
“Workers by and large have had the luxury of choice over the past year in terms of deciding which of multiple offers to pick,” said Simona Mocuta, chief economist at State Street Global Advisors. “If indeed the consumer sentiment surveys are right and the sense is that things are starting to shift, maybe there’s an incentive for you to make your choice and be done with it.”