Hiring fell considerably and unemployment rose in July. The unemployment rate was up for the fourth straight month as eyes turn to whether or not U.S. economic policymakers will act in the coming months.
Employers added only 114,000 jobs in July, according to data released Friday, Aug. 2, by the Bureau of Labor Statistics . That number missed economists' expectations of 175,000. Meanwhile, the unemployment rate in July ticked up to 4.3% from 4.1% in June . The unemployment rate is at its highest level since October 2021.
"That is a meaningful slowdown," former Acting and Deputy U.S. Labor Secretary Seth Harris told Straight Arrow News Friday morning. "It's still a positive number. It's certainly not a sign of a recession, but it absolutely is a warning sign."
The number of unemployed people increased by 352,000 to 7.2 million in July.
"That is a troublesome number, we are actually beginning to see a meaningful increase in the number of people who are unemployed," Harris added.
Meanwhile, the number of long-term unemployed workers, those who are jobless for 27 weeks or more, sits at 1.5 million in July, up from 1.2 million one year ago. Long-term unemployed workers account for 21.6% of all unemployed people.
The labor force participation rate, or people who are either in a job or actively looking for a job, didn’t change much in July and sits at 62.7%.
"That means people aren't completely abandoning ship and leaving the labor market and just giving up all hope that they're going to be able to find a job," Harris said of labor force participation. "That would really be a troublesome indicator. So we're not there yet. These numbers are not crisis numbers, but they are an indication that the Federal Reserve is at real risk of missing the boat, of being too late to the game when it comes to making sure that jobs continue to grow and that workers have good opportunities in the labor market. That's part of their dual mandate. Inflation is not supposed to be their only concern."
The Federal Reserve’s dual mandate is price stability and maximum employment. That means an inflation rate around 2% and a labor market where most everyone who wants a job can find one.
The Fed has been aggressively addressing inflation, which is down to 3% from a 9% peak two years ago, according to the consumer price index. That has translated to interest rates that are at a two-decade high.
Americans have been waiting for relief from the Fed in the form of rate cuts. The Fed funds rate, which affects interest rates on nearly every loan , currently sits at around 5.33%.
The post Weak jobs report and uptick in unemployment ‘a warning sign’ appeared first on Straight Arrow News .
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