US unemployment rises to 6.2%

US unemployment rose by 0.1 per cent in July according to the US Bureau of Labour Statistics.

This brings unemployment up to 6.2 per cent after it had fallen to a six year low of 6.1 per cent in June

July’s rise in unemployment follows the recent slashing of the US growth prediction from 2.8 per cent to 1.7 per cent by the IMF. 

During July there was an increase in non-farm payroll employment of 209,000 jobs but Capital Economics argues this increase in unemployment is due to 329,000 people joining the active labour force.

These 290,000 jobs were widespread in terms of sectors with people finding work within construction, retail, manufacturing and business.

Capital Economics chief US economist Paul Ashworth says: “Despite the strength of employment gains and the decline in the unemployment rate, there is still no sign of an acceleration in average hourly earnings, which were unchanged in July.

“Nevertheless, survey-based indicators point to a pick-up in wage growth soon and other measures, such as the employment cost index and compensation per employee hour, already show the beginnings of an acceleration in their growth rates. Accordingly, there is nothing here that changes our view that the Fed will begin to raise rates in March next year, a little earlier than most expect.”