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The US economy is creating fewer jobs than expected with the employment market performing weaker during the summer than previously thought, official figures show.<\/b><\/p>\n
There was a surprise shedding of 23,000 jobs last month, with declines driven by cuts in local government education and retail roles, despite analysts predicting growth.<\/p>\n
The Bureau of Labor Statistics also revised down the number of jobs added in May and June by 103,000, signalling a slow summer of job creation.<\/p>\n
Analysts said the latest figures could reduce pressure on the US central bank, the Federal Reserve, to raise interest rates next month, despite high inflation.<\/p>\n
Nancy Vanden Houten, lead economist at Oxford Economics, said expectations of interest rates being raised had been “scaled back”, since the decision last month.<\/p>\n
US stock markets opened higher on Friday following the release of the latest jobs figures on the prospect that the weaker data might prevent any rate hikes.<\/p>\n
Analysts had expected an uptick in the number of jobs being added to the economy last month of 80,000, as opposed to a loss of 23,000.<\/p>\n
As well as falls in local government education there were also declines in retail roles, including in wholesale stores, hypermarkets, gas stations and general mechanise shops.<\/p>\n
Despite fewer jobs being created, the Bureau of Labor Statistics said the unemployment rate actually dipped to 4.1% from 4.2%, as the number of people in work or looking for work declined slightly.<\/p>\n
Average hourly earnings rose by 3.2% in the year to July, compared with the 3.5% economists expected, with average hourly earnings for all employees on private non-farm payrolls at $37.62.<\/p>\n
Payrolls do have a tendency to be softer in July, but chief investment officer of Premier Miton Neil Birrell said the US jobs market was weaker “by some distance”.<\/p>\n
“Labour force participation is back at levels not seen since the days of Covid, meaning jobs just aren’t being created,” he said.<\/p>\n
“This does leave the Fed with the problem of a weak jobs market providing a read across to growth, all at a time when inflation is a problem, but this data will ease the pressure to hike rates. It’s a big call in September.”<\/p>\n<\/div>\n