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Job Report July: The US economy created 943,000 jobs last month

The job growth in June was also revised up to 938,000 new jobs, demonstrating the strong pace of recovery in the summer.

“I haven’t found a flaw in this job report yet,” wrote Harvard economist Jason Furman Twitter (TWTR).

America has created 16.7 million jobs as of May 2020. But it’s still 5.7 million fewer than before the pandemic.

President Joe Biden on Friday touted the success of his administration’s economic policies but softened his message by saying, “We will undoubtedly have ups and downs as we continue to battle the delta wave of Covid.”

There’s still a long way to go

The hospitality and leisure industries, which were decimated by blocking measures last year, again made the largest contribution to the growth in jobs, accounting for more than a third of the total. In restaurants and bars alone, around 253,000 jobs were added last month.

While its rapid growth is great news, the industry has still shed 1.7 million jobs since February last year.

The use of seasonally adjusted data also increased in the education sector. However, the labor exchange warned that the adjusted data could overestimate the July hiring as education hires and layoffs were so skewed by the pandemic.

The average hourly wage rose 11 cents to $ 30.54 for the fourth consecutive month as high labor demand pushes companies to pay more to attract employees.

The unemployment rate fell to its lowest level since the beginning of the pandemic and fell in almost all of the population groups counted in the survey.

The unemployment rate for black teenagers rose four percentage points to 13.3%.

The participation rate rose to 61.7%, the employment rate rose to 58.4%. Both measures are still below their level from February 2020.

“The stagnating activity rate confirms that there are millions of potential workers who are inactive, currently out of work and therefore not among the unemployed,” said Cailin Birch, global economist at The Economist Intelligence Unit.

However, nearly a million people found work in July, and that bodes well for both the recovery in jobs and the consumer spending the US economy needs to grow, Birch said.

The pandemic recovery has been defined by a mismatch between corporate demand for staff and the ability and willingness of workers to get back outside amid childcare issues, virus fears and generous benefits.

Fed implication and delta risk

For the Federal Reserve, which has touted it needs to see more improvements in the job market before adjusting its policies, July job numbers are exactly what the doctor ordered.

While the central bank seems in no hurry to end its easy money policy, the continued growth of summer jobs is an important piece of the puzzle. In June, the Fed’s consensus forecast showed a rate hike in 2023, while it is widely expected to scale back its monthly bond purchases by then.

Accordingly, the US stock market was mixed on Friday as investors digested the good economic news along with the potential political repercussions.

In addition, there is a new hurdle on the road to work recovery: the Covid-19 Delta variant has imposed restrictions on public life in some parts of the country, and the Centers for Disease Control and Prevention have their mask guidelines updated for who are vaccinated.

So far, Delta’s increased virus spread has not weighed heavily on job data, but that may change in the next few reports.

– CNN’s Betsy Klein and Kate Sullivan contributed to this report.

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