Job Growth Surged in July, Unemployment Falls to Pandemic Low
August 6, 2021
The U.S labor market grew at the fastest pace in nearly a year and unemployment fell sharply in July, providing the economy a tailwind against any potential disruption faced by the Delta variant of the coronavirus.
Nonfarm payrolls grew by a seasonally adjusted 943,000 in July, the biggest gain since August 2020, according to the Labor Department. The unemployment rate fell to 5.4% for the month, down from 5.9% in June. This is the lowest unemployment rate since the pandemic began in March 2020.
Both figures beat expectations. Economists surveyed by Dow Jones anticipated 845,000 new jobs and an unemployment rate of 5.7%. Though estimates varied widely as economists tried to predict how the surging Covid numbers would impact the economy.
Average hourly wages also saw a big boost, climbing 0.4% for the month, and wages are up 4% from the same month last year, potentially fueling inflationary pressure.
The drop in the unemployment rate is even more impressive considering the uptick in the labor participation rate. The rate climbed to 61.7% as more workers came in from the sidelines. This is the highest participation rate since the pandemic started.