CUNA Economics: Job Growth Beginning to Slow

Credit Union National Association (CUNA) Senior Economist Dawit Kebede, PhD, issued the following statement in response to the Labor Department’s July Employment Situation:     

“The U.S. economy added 187,000 jobs in July, slightly softer than expectation. Job gains reported for May and June were also revised down by 50,000 combined. This implies employers in the last three months added on average 218,000 jobs per month. This is robust job growth but cooler than previously reported. The average weekly hours also declined by 0.1 last month in another indication of the slowing job market. The unemployment rate edged down to 3.5%. 

“Average hourly earnings increased 0.4% last month, equivalent to an annualized rate of 4.8%. Although wage growth had been moderating from its peak levels, it is still higher than the normal 3.5% growth rate consistent with a 2% inflation target.     

“Slower job growth is good news for the Federal Reserve looking for a better balance in labor demand and supply in the fight to bring inflation down. On the other hand, wage growth is still hot, but it is expected to cool down as hiring slows.”