US economy created 943,000 jobs in July, unemployment rate fell to 5.4%

The strengthening US labor market bolstered the economic recovery in July ahead of the threat of the Delta variant, with employers creating jobs at the fastest pace for nearly a year and the unemployment rate falling sharply.

Non-farm payrolls rose by seasonally adjusted 943,000 in July, from the revised upward gain of 938,000 in June, the Labor Department said on Friday. The employment increase in July was the largest since August 2020.

The unemployment rate, derived from a separate household survey, fell to 5.4% in July from 5.9% in June. The unemployment rate in July was the lowest since March 2020, when the coronavirus pandemic first took hold in the United States. The number of Americans working or looking for work has increased over the past month and wages have increased at a faster rate, especially for restaurant workers.

Friday’s report showed that the US economy faces any threat posed by the Delta variant with a strong tailwind. The economy recovered quickly this year with the availability of vaccines, the reopening of businesses, pent-up consumer demand, and aid stemming from several rounds of government stimulus laws. Falling unemployment and rising wages further strengthen the underlying strength, and so far there is little evidence to suggest that the recent spike in cases is significantly slowing the US recovery.

Surveys for the employment report were conducted in the middle of the month. This was before some local governments reimposed mask mandates and other restrictions, and before many employers announced they would require employees to wear masks, be vaccinated or get tested regularly. The companies have also delayed plans to return to the office, including announcements from Amazon.com Inc. and Wells Fargo & Co.