US Job Growth Disappoints as Wages Inch Up

July hiring falls short of economists’ expectations, prompting concerns

The American economy added fewer jobs than anticipated in July, a stark contrast to steady wage growth, according to recent data released by the US Ministry of Labor.

Hiring Slowdown Sparks Concern

The economy generated only 73,000 new positions outside the agricultural sector last month. This figure significantly missed the 104,000 jobs economists had projected. Compounding the surprise, employment figures for the two preceding months were collectively revised downward by a substantial 258,000 jobs.

Ralf Umlauf from Helaba commented on the situation, stating, “the number of newly created places in July fell unexpectedly weakly.” He further noted that the extensive downward revision for May and June, impacting nearly 260,000 jobs, was particularly surprising.

Elmar Völker, an economist at LBBW, expressed his dismay, analyzing that “the increase in employment was a bitter disappointment.”

Wages Show Modest Increase

In a contrasting trend, average hourly earnings saw a 0.3 percent rise compared to the previous month, meeting economists’ average expectations. This follows a 0.2 percent increase in June. On an annual basis, wages climbed 3.9 percent, representing a slight acceleration from the prior month’s annual gain.

Broader Economic Context

This mixed report comes as the Federal Reserve continues to navigate inflation concerns. For instance, in May 2023, the average hourly wage for all employees in the private sector was $33.46, according to the Bureau of Labor Statistics (BLS).