US nonfarm payrolls unexpectedly rise in July, bolster Fed’s hawkish rate-hike view



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US nonfarm payrolls unexpectedly rise in July, bolster Fed’s hawkish rate-hike view

On Friday, data released from the US Labour Department had unveiled that US nonfarm payrolls took a giant leapfrog last month, handing out the US Fed a textbook manoeuvre to hold forth on its ultra-hawkish monetary policy.

Besides, other economic data released earlier in the day had unenveloped that the US employment rate rose above its pre-pandemic level, however, average hourly wages continued to mount sharply, which would likely to contribute further upside momentum to a lacerating inflation-surge across the world’s largest economy.

Although, latest job data could be viewed as a sign that the recession risk lurking over US economy might have eased, yet several analysts were quoted saying followed by release of the data that the US economy has still been in the brink of a gruesome recession, as workers’ participation rate tottered as predicted by the US Fed.

Besides, a hawkish rate-hike cycle coupled with an increase in wage growth, would unlikely to fuel up business activities across the economy. Nonetheless, looking at the brighter spot, new orders for US-made goods jumped last month, while services sector activities bounced back.

However, business borrowing for equipment, a critical indicator to future investment, fell last month.

US non-farm payrolls rise last month

According to US Labour Department, US employers had created a whacking 528,000 jobs in July despite a sharp shoot-up in interest rates.

However, as consumers spending continued to soar at a breakneck pace, vindicating a clutch of corporate megaliths’ attempt to push their additional expenses down to end-consumers, inflation-surge would likely to sustain, suggested analysts.

US unemployment rate, in tandem, fell to a pre-pandemic level of 3.5 per cent compared to a reading of 5.2 per cent logged a month earlier, while average hourly earnings rose 5.2 per cent over past twelve months through July on a year-on-year basis.