Payroll increases by 943,000 in July as unemployment rate slips to 5.4%

Hires rose in July despite fears over the delta variant of Covid-19 and as companies grappled with tight labor supply, the Labor Department reported on Friday.

The non-farm payroll increased by 943,000 for the month while the unemployment rate fell to 5.4%, according to the department’s Bureau of Labor Statistics.

Economists polled by Dow Jones were looking for 845,000 new jobs and an overall unemployment rate of 5.7%.

Average hourly wages also rose more than expected, increasing 0.4% for the month.

The drop in the overall unemployment rate seemed even stronger as the labor force participation rate climbed to 61.7%, tied for the highest level since the start of the pandemic in March 2020. A calculation separate which includes discouraged workers and those in part-time jobs for economic reasons, it fell further to 9.2% from 9.8% in June.

As has been the case for several months, the leisure and hotel industry led to job creation, adding 380,000 jobs over the month, including 253,000 in bars and restaurants. The sector was hit hardest during the pandemic, but has shown steady gains as the economy reopens.

Education also posted strong gains for the month, with 261,000 new hires. The BLS warned, however, that the pandemic had distorted industry figures and likely increased the number for July.

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