U.S. Nonfarm Payrolls Soar 528,000 in July By

© Reuters.

By Scott Kanowsky 

Fxgecko.com -- U.S. job growth unexpectedly accelerated in July, running counter to concerns that soaring price inflation and surging interest rates are hitting labor demand in the world's largest economy.

According to the Labor Department, non-farm payrolls rose by 528,000 during the month versus the revised figure of 398,000 in June. Analyst had expected the reading to slide to 250,000.

The unemployment rate also ticked slightly lower to 3.5%.

Friday's release may bolster the case made by some officials in Washington that, despite recently weak economic data, the U.S. is not facing an imminent recession.

Fueling these fears, in particular, was gross domestic product in the U.S., which fell in the second quarter. That meant the country has now posted two straight three-month periods of contraction, fulfilling the widely accepted criteria for a "technical recession." However, the National Bureau of Economic Research, who ultimately arbitrates whether the U.S. has tipped into a recession, has not made such an announcement yet.

Claims for unemployment benefits also edged up to nearly a seven-month high of 260,000 last week, adding to speculation that the labor market may be starting to slow as pressure - especially from eye-watering consumer price growth and higher borrowing costs - mounts on the broader economy.

But the Biden administration has moved to reassure Americans that the economy remains resilient, arguing that it is instead experiencing an inevitable post-boom deacceleration in activity.

Meanwhile, Federal Reserve chairman Jerome Powell pushed back last week against the notion that the below-zero GDP print signals a recession. Powell said that interest rates, which the Fed has been aggressively lifting in a bid to cool red-hot inflation, could stand to jump even higher without weighing on the economy.

Futures on all major Wall Street indices were lower in the wake of the jobs report, while the U.S. Dollar Index zoomed up by 0.81% to 106.52 as of 08:54 EST (1254 GMT).

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