WASHINGTON, 2nd August, 2024 (WAM) – The U.S. unemployment rate jumped to near a three-year high of 4.3% in July amid a significant slowdown in hiring, heightening fears the labor market was deteriorating and potentially making the economy vulnerable to a recession.
The increase in the unemployment rate from 4.1% in June marked the fourth straight monthly increase, the Labor Department reported on Friday, according to Reuters.
Its rise from a five-decade low of 3.4% in April 2023 to now the highest level since September 2021 all but guarantees a September interest rate cut from the Federal Reserve, with economists calling for a 50 basis point reduction in borrowing costs.
Nonfarm payrolls increased by 114,000 jobs last month, the Labor Department's Bureau of Labor Statistics said. That was well below the 215,000 jobs per month added over the last 12 months, and the at least 200,000 that economists say are needed to keep up with growth in the population, accounting for the recent surge in immigration.
The healthcare sector continued to lead employment gains, with payrolls rising by 55,000 jobs. Construction payrolls increased by 25,000 jobs, while leisure and hospitality added 23,000 positions.
Government employment rose by 17,000 jobs. There were also employment gains in the transportation and warehousing as well as social assistance sectors.
But information industry payrolls dropped 20,000 jobs. Financial activities lost jobs as did professional and business services, with temporary help services positions - a harbinger of future hiring - declining by a further 8,700.