Washington, Aug 6

Employment in the US jumped by much more than expected in the month of July, according to a closely watched report released by the Labour Department.

The report released on Friday by the Department's Bureau of Labor Statistics (BLS) showed non-farm payroll employment up by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June, reports dpa news agency.

Economists had expected employment to climb by about 250,000 jobs compared to the addition of 372,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate unexpectedly edged down to 3.5 per cent in July from 3.6 per cent in June.

The unemployment rate was expected to remain unchanged.

The BLS report showed that the labour force participation rate slightly dropped to 62.1 per cent, still below the pre-pandemic level of 63.4 per cent, reports Xinhua news agency.

The number of persons not in the labour force who currently want a job was 5.9 million in July, little changed over the month. This measure is above its February 2020 level of 5.0 million.

In July, 2.2 million persons reported that they had been unable to work because their employer closed down or lost business due to the pandemic, up from 2.1 million people in June. The figure was 1.8 million in May.

Average hourly earnings for all employees on private non-farm payrolls rose by 15 cents, or 0.5 per cent, to $32.27 in July, the BLS report showed.

Over the past 12 months, average hourly earnings have increased by 5.2 per cent.

The Labour Department had reported on Tuesday that the number of job openings fell sharply by 605,000 to 10.7 million by the end of June, indicating weaker labour market demand as the Federal Reserve raises interest rates.

Even with the sharp decline in job openings, there were still approximately 1.8 job positions per available worker, signaling continued labour market tightness.

As the Federal Reserve ramps up its fight against surging inflation, the strong job market may be about to take a turn for the worse.

US employment surges much more than expected in July