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Jobs Report: 943,000 New Additions Tops Forecasts, Unemployment Falls To 5.4%

The U.S. economy added 943,000 new jobs last month, the BLS said Friday, a figure that topped Street forecasts and adds further pressure on the Federal Reserve's low-rate policy stance.

The U.S. economy added nearly 1 million jobs last month, the Labor Department said Friday, as government hiring boosted the headline total and private sector gains defied the recent surge in Delta-variant infections.   

The Bureau for Labor Statistics said 943,000 new jobs were created last month, with headline unemployment rate falling to a post-pandemic low of 5.4%. The July tally was firmly ahead of the Street consensus forecast of 880,000.

The BLS also revised its June jobs addition estimate to 938,000 from 850,000 and noted that hourly wages were up 0.4% on the month to $30.54 per hour, and 4% on the year, both figures coming in ahead of Street forecasts.

"This not only was a strong jobs report by nearly every measure, it also signals more good things to come. The 261,000 jobs added in local government and private education were particularly encouraging," said Robert Frick, corporate economist at Navy Federal Credit Union. "The lack of teachers has kept many parents, mainly mothers, at home to take care of their kids and supervise their education."

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"The one caveat is the Jobs survey was done on July 12, before infections from the COVID-19 Delta variant really took off," he added. "The effect this will have on jobs, especially in the leisure and hospitality industries, is unknown, though so far it appears to be minimal."

U.S. equity futures moved modestly higher following the data release, with contracts tied to the Dow Jones Industrial Average indicating a 90 point opening bell gain and those linked to the S&P 500 priced for a 1 point bump.

Benchmark 10-year note yields, meanwhile, rose to 1.288% while the dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.41% higher at 92.618, extending a weekly rally fired by comments from Fed Vice Chair Richard Clarida, who told an investor conference that  he could "certainly see supporting announcing a reduction in the pace of our purchases later this year."

Earlier this week, a reading of private sector job growth from ADP indicated a weaker-than-expected 330,000 new positions were created last month, with the payroll processing group also lowering its June tally by 12,000 to 680,000.

The Labor Department's total of weekly jobless claims fell to 385,000 for the period ending July 31, while continuing claims, which are calculated a week in arrears, dipped below 3 million for the first time since the pandemic.