Economy added 943,000 jobs last month, vs. estimate for 850,000

The economy added 943,000 jobs in July, the Bureau of Labor Statistics said Friday, compared to analysts’ expectations of 850,000 positions added. It’s the biggest monthly gain since August 2020.

The unemployment rate fell sharply to 5.4 percent from 5.9 percent, though 8.7 million Americans remain out of work.

While likely to provide a shot of confidence for Wall Street, economists say Friday’s data underscores the volatility that remains in the labor market and makes it harder for employers to forecast or invest — and could crimp consumer spending. The monthly data was gathered before the delta variant of the coronavirus started to surge across the U.S.

The official government data came after payroll processor ADP’s monthly tally of private-sector job growth fell far short of expectations when it was released Wednesday. The number of jobs added plunged from 680,000 in June to just 330,000 in July, sharply below the 653,000 anticipated.

ADP Chief Economist Nela Richardson characterized it as a “marked slowdown” in a news release and blamed more virulent Covid-19 variants and bottlenecks in labor supply making it harder for employers to add workers.

“It could be telling us people are still not returning to the labor force in the sort of numbers we’re expecting, particularly in cases where the delta variant is surging,” said James McCann, deputy chief economist at Aberdeen Standard Investments.