The U.S. jobs market showed robust growth in July, returning to pre-pandemic level despite initial estimates that ranged from a low of 350,000 to 1.2 million.
Both new jobs and the unemployment rate showed progress toward the economic recovery. Non-farms payrolls for July came in at an 11-month high of 943,000, up from 850,000 in June. The unemployment rate fell from 5.9% in June to 5.4% in July, which was ahead of expectations and the lowest rate since prior to the beginning of the pandemic in March 2002.
As state unemployment supplemental benefits start to expire, the numbers should continue to improve. Economists are mostly expecting strong growth for the next couple of months, but the Delta variant of the coronavirus has become a wild card for both the labor market and the economy.
However, jobs growth has not been as strong as some economists have expected as America’s workforce gradually rebuilds from its sharp pandemic-induced job losses. Instead, employers have struggled with unfilled openings. Many are hoping for relief once schools reopen in September and extended employment benefits expire in September, however the Delta variant may have other plans.
After Federal Reserve Chairman Jerome Powell said last week he would like to see a few strong jobs reports before the Fed begins to trim its $120 billion a month purchases of Treasury and mortgage securities, the numbers will be scrutinized further.
