US unemployment rate drops to 3.5% in July, with 528,000 jobs created

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The fee of unemployment From United States fell in July to 3.5%, according to data released by the Center for Labor Statistics this Friday (5th). The country’s economy created around 528,000 new jobs, adding up the generation in the public and private sectors.

The numbers, contained in the Payroll report, exceeded market expectations, which expected the rate to remain at the 3.6% registered in June and with a smaller generation of vacancies, of 250 thousand. The result represents the 19th consecutive growth of the labor market .

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Also according to the government institution, the average income of workers in the private sector grew 0.5% in July compared to the previous month.

The June data was revised up, indicating 398,000 job openings instead of the previously reported 372,000.

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The report indicates a healthy economic picture, despite two quarters of contraction of the Gross Domestic Product (GDP ). Demand for labor has slowed in interest rate sensitive sectors such as housing and retail, but airlines and restaurants are still unable to find enough workers.

The National Agency for Economic Research, a sort of official arbiter of recessions in the country, defines the phenomenon as “a significant decline in economic activity spread throughout the economy, lasting more than a few months, normally visible in production, employment, real income, and other factors”. indicators”.

For Étore Sanchez, chief economist at Ativa Investimentos, the result reinforces the “very positive outlook” for activity in the United States, as well as the bets that the Federal Reserve will maintain an aggressive cycle of interest rate hikes, with a third consecutive increase of 0.75 percentage points.

Last week, the US central bank increased its interest rate by 0.75 pp accumulating 2.25 points high since March.

the mayor, Jerome Powell stated that the next increase will depend on the data released until September without ruling out either an increase of the same magnitude or a smaller value.

The upturn in the economy represents an increase in demand, which in turn impacts on the inflation , which is at the highest level in the last 40 years. As a result, the autarchy may need to raise interest rates with more intensity and speed to slow down activity, but with the risk of taking the country to a recession .

“In short, the job market showed strength again and opened the way, once again, for the Fed to do what has to be done with interest rates in search of the convergence of inflation to the target”, says Sanchez.

*With information from Reuters

Source: CNN Brasil

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