US Jobs Market Surprises with Unexpected Decline
The US jobs market surprised analysts by shedding 23,000 jobs last month, despite expectations of an uptick in employment. The Bureau of Labor Statistics reported that the declines were driven by cuts in local government education and retail roles, including wholesale stores, hypermarkets, gas stations, and general merchandise shops.
The latest figures reduce pressure on the Federal Reserve to raise interest rates next month, despite high inflation running at an annual rate of 3.5%. Average hourly earnings rose by 3.2% in the year to July, compared with the 3.5% economists expected. The unemployment rate actually dipped to 4.1% from 4.2%, as the number of people in work or looking for work declined slightly.
The Federal Reserve's newly-appointed chair, Kevin Warsh, has offered little forward guidance on future interest rates. Consumer prices remain elevated, with gasoline prices having gone back above $4 on average following recent escalations.