Unemployment in the US is rising

The increase to 4.3% from 4.1% recorded in June marks the fourth consecutive monthly increase

The U.S. unemployment rate rose for a fourth straight month in July to 4.3%, up from 4.1% the previous month, the Bureau of Labor Statistics reported Friday, the highest level since the pandemic began.

The U.S. added just 114,000 jobs last month, down from 206,000 in June and well below the 215,000 jobs added per month over the past 12 months, the data showed. Economists polled by Reuters had expected the figure to rise by 175,000.

The number of unemployed people in the U.S. rose by 352,000 to 7.2 million, up significantly from 5.9 million a year earlier, when the unemployment rate was 3.5%.

Although several sectors continued to see employment growth – notably in healthcare – the scope of employment growth continued to narrow, with 49.6% of industries reporting employment growth, down from 56.0% in June.

Average hourly earnings rose 0.2% in July after rising 0.3% the previous month. In the 12 months through July, wages rose 3.6%, the smallest year-over-year increase since May 2021 and leaving wage growth just above the 3.0% to 3.5% range seen as consistent with the Fed’s 2% inflation target.

Some analysts say Hurricane Beryl, which battered the Texas economy last month, may have disrupted hiring. Julia Pollak, chief economist at ZipRecruiter, told the AP that employers could cut hours and make temporary layoffs, suggesting they are nonetheless optimistic that lower interest rates could help turn things around.

Friday’s report added fuel to growing concerns that the Federal Reserve waited too long to cut rates. On Wednesday, the Fed decided to keep its benchmark interest rate in a range of 5.25% to 5.50%, where it had been for more than a year.

Fed Chairman Jay Powell has indicated the first rate cut in the post-pandemic era could come in September. Economists polled by Reuters also expect rate cuts in November and December.