US July Employment Unexpectedly Falls, Clouding Rate Decision

[Anchor]

Contrary to market expectations that US jobs would increase last month, it has been announced that they actually decreased. Expectations for a benchmark interest rate freeze have grown, sending all three major New York stock indices higher to close the session.

Reporting from New York, this is Kim Hyunwoo.

[Reporter]

The US Department of Labor announced that non-farm employment in July decreased by 23,000 compared to the previous month.

This completely missed forecasts, as most projections ahead of the announcement anticipated job growth, including a Dow Jones expert consensus of an 83,000 increase.

Looking by industry, the biggest impact came from a 50,000 drop in local government education employment, while travel and accommodation sectors also saw a 40,000 decline following the conclusion of the World Cup.

The labor force participation rate also fell to 61.4%, marking the lowest figure since the COVID-19 pandemic in 2021.

A lower labor force participation rate means an increase in the number of people who have given up on looking for jobs altogether.

In the wake of this, the unemployment rate edged down slightly.

[Rana Foroohar / Global Economic Analyst : (The current economic situation) is making companies cautious, causing them to hold back on additional hiring, even if they are not resorting to immediate layoffs.]

As a cold wind blows through the job market, defying market expectations, the US Federal Reserve is expected to face deeper deliberation ahead of next month's rate decision meeting.

In fact, the Chicago Mercantile Exchange's FedWatch had projected the probability of the Fed freezing the benchmark interest rate at 45% as of yesterday (the 7th), but adjusted the freeze probability to 55% after the employment market data was released.

With growing expectations for an interest rate freeze acting as a positive factor for the stock market, all three major New York stock indices closed higher today, wrapping up the week.

(Camera & Reporting: Lee Hee-hoon, Video Editing: Lee Seung-yul)
※ Please note: This article was translated by AI and may contain errors.