ADDS MBA CHIEF ECONOMIST'S COMMENTS
By Ovunc Kutlu
ISTANBUL (AA) - The US economy added 114,000 jobs in July, significantly below market estimates, according to figures released Friday by the Labor Department.
The market expectation for nonfarm payrolls was a gain of 176,000 jobs last month.
Job additions for June were also revised down by 27,000, from 206,000 to 179,000.
The unemployment rate increased to 4.3% in July from 4.1% in June, against market expectations that it would remain unchanged.
The number of unemployed people decreased to 5.9 million in July from 6.8 million in June, while the labor force participation rate edged up to 62.7% from 62.6% during that period.
The employment-population ratio, meanwhile, slightly fell to 60.0% in July, from 60.1% the month before.
In July, the number of people not in the labor force who currently want a job increased by 366,000 to 5.6 million, the Labor Department said in a statement.
"These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job," it added.
Last month, most employment was seen in health care with a gain of 55,000. This was followed by construction with 25,000, and transportation and warehousing with 14,000.
In July, average hourly earnings for all employees on private non-farm payrolls increased by 0.2% to $35.07 per hour, compared to June.
That figure showed an annual increase of 3.6%, compared to the same month of 2023.
President Joe Biden said American economy has created nearly 16 million jobs since he and Vice President Kamala Harris have taken office in January 2021, adding average unemployment has been lower than any administration in 50 years.
"Today’s report shows employment is growing more gradually at a time when inflation has declined significantly," he said in a statement released by the White House.
"Business investment remains strong thanks in part to our investing in America agenda, which is creating good-paying jobs in communities that have been left behind," he added.
Biden noted that incomes have increased faster than prices, but added that prices are still too high.
"We will keep fighting to lower costs by taking on price gouging, capping prescription drug costs, and building more homes," he said.
"Congressional Republicans are siding with special interests at the expense of the middle class—with more tax cuts for billionaires and big corporations while threatening Social Security and Medicare," he added.
"The job market definitively slowed in July," Mike Fratantoni, Mortgage Bankers Association's (MBA) chief economist, said in a statement.
"Nonfarm payroll growth at 114,000 was well below the 12-month average of 215,000, while the unemployment rate moved up to 4.3%, and wage growth slowed to 3.6%," he added.
Fratantoni said the slowdown is consistent with trends in other macroeconomic data, which include slower hiring rate, increases in initial claims for unemployment insurance, signs of contraction in the manufacturing sector, and some signs of stress for households.
"Job growth was weak across the board, with small gains or losses across the economy. Not only did the headline unemployment rate increase, but the broader U-6 measure showed an even bigger increase, highlighting that more people are struggling in this job market," he explained.
The economist said Friday's jobs report "certainly support" an interest rate cut by the Federal Reserve in September, but added that the next inflation report needs to confirm that price growth is also slowing.
"The market is moving ahead of the Fed, bringing down longer-term rates including those for mortgages, which should lead to both more home purchases and a pickup in refinance activity," he noted.