The unemployment rate fell to 3.5% in July as employers added 528,000 jobs, significantly higher than the average monthly gain over the prior four months (+388,000).
Job growth was widespread across industries, led by gains in leisure and hospitality (+96,000), professional and business services (+89,000), and health care (+70,000).
Wage growth remains robust with average hourly earnings increasing 5.2% over the past year.
However, the number of job openings fell for the third consecutive month in June, the largest one-month decline since the government began tracking this data. Employers are responding to recession concerns and rising interest rates.
Many Americans remain out of the job market: Both the labor force participation rate and the employment rate have stagnated since March, and both measures are still well below their pre-pandemic levels. Meanwhile, the number of firms announcing job cuts is increasing.
This may be the last strong jobs report we see for some time as the economy is expected to slow in response to the Federal Reserve increasing interest rates to address inflation. Companies will continue to fill key positions as they struggle with worker shortages, but the U.S. could be headed for period of stagflation (relatively high inflation and low economic growth) for the rest of 2022.