U.S. nonfarm payrolls rise more than forecast in July; unemployment rate declines more than expected

The U.S. Labor Department announced on Friday that nonfarm payrolls rose by 943,000 in July after a revised 938,000 increase in the prior month (originally a gain of 850,000). This was the largest monthly advance since August 2020.

According to the report, notable job gains were recorded in in leisure and hospitality (+380,000), in local government education (+221,000), and in professional and business services (+60,000).

The unemployment rate dropped to 5.4 percent in July from 5.9 percent in June. This was the lowest rate since March 2020.

Economists had forecast the nonfarm payrolls to increase by 870,000 and the jobless rate to drop to 5.7 percent.

The labor force participation rate edged up to 61.7 percent in July from 61.6 percent in the previous month, while hourly earnings for private-sector workers advanced 0.4 percent m-o-m (or $0.11) to $ $30.54, following a revised 0.4 percent m-o-m gain in June (originally an increase of 0.3 percent m-o-m). Economists had forecast the average hourly earnings to rise 0.3 percent m-o-m in July. Over the year, the average hourly earnings jumped 4.0 percent in July, following a revised 3.7percent surge in July (originally a climb of 3.6 percent).

The average workweek was unchanged at 34.8 hours in July, being slightly above economists' forecast for 34.7 hours.