HomeTop U.S. NewsU.S. Labor Market Delivers a Surprise With Massive Job Gains

U.S. Labor Market Delivers a Surprise With Massive Job Gains

The Bureau of Labor Statistics released its labor market report for July on Friday that delivered some surprising numbers. The biggest shock was 528,000 jobs gained, which was more than double compared to the 250,000 experts predicted.

The massive job gains have brought down the unemployment rate to 3.5%, returning the job market to its pre-pandemic levels. This jobless rate was last season in February 2020, when it marked the lowest point in almost 50 years.

Among other bits of info, the Bureau of Labor Statistics report also showed that Americans are earning 0.5% more per hour compared to an estimated 0.4%. Also, hourly earnings increased 5.2% year over year.

These numbers have caught experts by surprise as the Fed’s interest rate hikes and surging inflation were expected to cool off the U.S. labor market. However, it appears that the layoffs and job cuts mainly targeted the tech industry, with the service industry ramping up its hiring due to increased customer demand. A big part of the process was also businesses hiring back the employees they laid off during the pandemic.

Analysts now believe that these numbers will make the Fed even more aggressive with increasing interest rates. The committee is set to meet again in September when it might bump up the rates by another 0.7% points. This would be the third hike in the same range since June.

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