U.S. employers added a booming 528,000 jobs in July as the labor market now has recovered all 22 million jobs lost in the pandemic and continued to defy soaring inflation, rising interest rates and a slowing economy.
The unemployment rate fell from 3.6% to 3.5%, matching a 50-year low, the Labor Department said Friday.
Economists had estimated that 250,000 jobs were added last month, according to a Bloomberg survey.
Inflation hit a 40-year high of 9.1% in June, keeping the Federal Reserve on course to aggressively raise interest rates. The higher prices and borrowing costs have led consumers and businesses to slow spending and stoked recession fears.
But the labor market has shrugged off the turmoil, adding an average of about 380,000 jobs a month from March through June. Amid persistent pandemic-related worker shortages, companies have been hesitant to let workers go and continued to add staffers to meet the demands of a reopening economy.
Last week, however, initial jobless claims, a gauge of layoffs, rose to the highest level since November based on a four-week moving average. Tech giants such as Oracle, Amazon, Netflix and Robinhood have all announced significant job cuts recently.
Also, hiring has been expected to downshift now that the U.S. has recouped all 22 million jobs lost in the health crisis.
Michael Hobbs, president of Chicago-based PahRoo Appraisal & Consultancy, had planned to hire about 20 employees this year. Instead, he says he’s adding half that number because higher mortgage rates have triggered a sharp slowdown in home sales and refinancing.
Hobbs’ commercial business is still healthy and the need for appraisals is increasing, but he’s wary. “We would be growing a lot faster if not for the recession talk,” he says.
Jason Scott, however, still plans to bring on five employees a month at 120VC, his company that manages projects for businesses, and Brick & Matter, his marketing firm. Despite the recession chatter, clients are still catching up after scrapping projects during the pandemic, he says. Plus, he says, the recent flurry of layoffs have provided him a fresh pool of talented employees.
“I’m going to roll the dice,” he says.