AUGUST 9, 2021 – UNEMPLOYMENT RATE FALLS AS THE ECONOMY ADDS JOBS
The labor market took off last month with the US economy adding 943,000 new jobs, as the July unemployment rate fell to 5.4 percent. This was the best gain in eleven months and the unemployment fell 0.5 percent from June to the lowest level since the pandemic began. Wages were up 4 percent from a year earlier, with some companies paying bonuses to draw back workers.
We are not out of trouble yet, as the new delta variant of the virus may curtail the momentum that built up in July. The jobs data reported was collected mid-month, before employers started reinstating restrictions and delaying back-to-work plans.
As the unemployment rate ticks down, the Fed remains on track to taper its $120 billion of monthly asset purchases later this year. The timing could depend on what happens in August, the last labor report before the Fed’s next meeting on September 21-22.