ToplineAccording to Friday's Labor Department data, the United States added 943,000 jobs in July. This is more than economists anticipated and shows that the labor market may be finally on the right track to full recovery after the pandemic.Economists predicted that there would be almost 850,000 new jobs last month. AFP via Getty ImagesThe Key FactsIn July, the unemployment rate dropped to 5.4% from 5.9% in June. This is its lowest point since the pandemic. The July labor market report was the best since August. It beat consensus estimates of 845,000 jobs last month. In addition, the number added in June to the job market rose from 850,000 jobs to 938,000. The government reported that the number of Americans currently unemployed is 8.7 million. This figure has fallen by about 782,000 since June, but remains significantly higher than the pre-crisis level of 4,000,000 in February 2020. Strong growth in leisure and hospitality (which added 380,000 jobs last year) and food services and drinks places (which added 253,000 jobs) led to continued employment gains across all industries. Wages posted strong growth, climbing a greater-than-expected 4% year over year, and the labor force participation rate ticked up to 61.7%, compared to 61.6% in June. The U.S. economy has recovered approximately 14 million of 22 million jobs that were lost during the pandemic uncertainty of March and April last year.Surprising FactAt the height of pandemic uncertainty, April 2020, the unemployment rate reached a record high at 14.7%.Important QuoteRyan Detrick, chief market strategist at LPL Financial, stated in an email that there were some cracks in the armor but that today's jobs numbers showed that our economy is once again resilient and moving forward.Important BackgroundThe Federal Reserve promised to use all its tools to support the U.S. economy when markets crashed in March 2020 during the height of pandemic uncertainties. This was until significant progress was made in the labor market as well as inflation. To boost the economy's spending, that meant maintaining historically low interest rates and $120 billion monthly bond purchases. Since then, stocks have risen by nearly 90% to their latest high of Thursday's S&P 500. Experts have turned their attention to the labor market, which is in turmoil, as they try to predict when the Fed will ease its unprecedented economic support. Inflation has reached 13-year highs. Vital Knowledge Media founder Adam Crisafulli said Friday's strong jobs report should make it clear that no one is left wondering if the Fed will taper. He also stated that the central bank is "nearly certain" to cut its monthly asset purchases by January. Markets have been rattled by speculation about tapering starting, which would mean less support of stocks, over the past few month. This is expected to continue for the remainder of the year.Big Number13 million. According to Thursday's weekly data, that is how many people still received some form of government unemployment benefits last week. This is due to the staggering number of people who have stopped looking for work and are now in the labor force.Continue readingNew Jobless Claims Drop as Expected, While Continuing Claims Reach a New Post-Pandemic High (Forbes).Jobless Claims Hit Two-Month Plateau (Forbes)CBO estimates that $1 Trillion infrastructure bill would add $256 billion to the US deficit in 10 years, Forbes (Forbes).This is still a developing story. Keep checking back for more updates.
