U.S. hiring decelerated sharply last month in the face of high interest rates as employers added a weak 114,000 jobs, according to the Associated Press.
Today’s Labor Department report showed a drop from the 179,000 jobs created in June. Forecasters had expected to see 175,000 jobs in July. The unemployment rate rose to 4.3%.
The economy has proven unexpectedly sturdy in the face of the Federal Reserve’s campaign to tame inflation with high interest rates. The Fed raised its benchmark rate 11 times in 2022 and 2023, taking it to a 23-year high, but the higher borrowing costs appear to be taking a toll.
From January–June this year, the economy has generated a solid average of 222,000 new jobs a month, down from an average 251,000 last year, 377,000 in 2022, and a record 604,000 in 2021, when the economy bounded back from COVID-19 lockdowns.
