Job growth last month blows past analyst forecasts, as the U.S. jobless rate fell to the lowest since February 2020.
"This is a job market that just won't quit. It's challenging the rules of economics," said Becky Frankiewicz, chief commercial officer of hiring company ManpowerGroup in an email after the data was released."The economic indicators are signaling caution, yet American employers are signaling confidence.
The central bank has been boosting rates in an effort to tame inflation, which is running at the hottest levels in four decades. With the Fed's four rate hikes so far this year, it's becoming more expensive for consumers and businesses to borrow. Economists had expected that would contribute to businesses stepping back from hiring, but July's numbers demonstrate that employers are continuing to add workers.
The July payroll figure"reflects an economy operating at a very robust level, one that's obviously not in recession and that can withstand tighter monetary policy," Wall Street analyst Adam Crisafulli of Vital Knowledge said in a client note. Despite the strong labor market, other indicators show the economy is slowing down as the Fed pumps the brakes. Some analysts point out that job growth alone is an unreliable indicator of a downturn, noting that hiring often remains strong in the early stages of a recession.
For example, in the three months immediately preceding the housing crash-induced recession that started in December 2007, the Labor Department's monthly payrolls survey showed the economy gaining nearly 300,000 jobs per month, according to Societe Generale Cross Asset Research.
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