The July jobs report on Friday showed the U.S. economy gained 528,000 jobs last month, with the unemployment rate falling to 3.5% from 3.6%.
Economists polled by The Wall Street Journal had expected an addition of 258,000 jobs and unemployment staying at 3.6%.
• “In a clear sign that the U.S. economy is not in a recession, hiring accelerated in July, showing that the Fed’s fight against inflation is far from over. The 528K jobs gained were miles above the consensus of 250K and added to a +28K revision to the prior two-month job tally. This was a strong report across the board as hiring was widespread across industries, monthly wage growth accelerated to 0.5% (vs. 0.3% expected), and the unemployment rate ticked down to 3.5%, relative to the consensus for it to remain steady. … This report clearly dispels the notion of the economy already being in a recession, but it is much too hot for the Fed that is aiming to prevent a further tightening in the labor market in order to contain inflation.” — Katherine Judge, senior economist at CIBC Capital Markets
• “Overall, there is really nothing you can poke holes in here. … Taken together, the data flies in the face of the recession narrative that has developed in recent weeks, and it puts the possibility of a 75 bp rate hike on the table for September.” — Aneta Markowska and Thomas Simons, economists at Jefferies
• “Average hourly earnings rose by 0.5%, bringing yr/yr to 5.2%. Still too high for the Fed’s comfort level.” — Kathy Jones, chief fixed income strategist at Schwab Center for Financial Research, in a tweet
• “The unexpected acceleration in non-farm payroll growth in July, together with the further decline in the unemployment rate and the renewed pick-up in wage pressure, make a mockery of claims that the economy is on the brink of recession. This raises the odds of another 75bp rate hike in September, although the outcome depends more on the evolution of the next couple of CPI reports. … Aside from the disappointment that labour supply appears to have stalled over recent months, this was another very strong report, and all the details appear to support continued aggressive rate hikes from the Fed.” — Michael Pearce, senior U.S. economist at Capital Economics
• “Well that doesn’t look like a recession!” — Nick Bunker, economic research director for North America at Indeed, in a tweet