U.S. Unemployment Rate Hits Near 3-Year High Amid Hiring Slowdown

The U.S. unemployment rate rose to a near three-year high of 4.3% in July, signaling a significant slowdown in hiring. The rise marks the fourth consecutive monthly increase, prompting fears of a potential recession. The labor market slowdown has influenced expectations for Federal Reserve interest rate cuts.

The U.S. unemployment rate soared to a near three-year high of 4.3% in July, attributed to a considerable slowdown in hiring. This spike incites concerns over the labor market's health and potential recession risks. The rise from 4.1% in June marks the fourth consecutive monthly increase, as reported by the U.S. Labor Department.

The employment report shows the smallest annual wage increase in over three years, which could lead the U.S. central bank to cut interest rates in September. Jeffrey Roach, chief economist at LPL Financial, notes that the data suggests a slowdown rather than a recession, but early signs indicate further labor market weakening.

Nonfarm payrolls rose by 114,000 in July, revised down from a 179,000 increase in June. Economists anticipated a gain of 175,000. Despite the Hurricane Beryl impact, the healthcare sector led job gains with 55,000 new positions. Wage growth remains above the Fed's inflation target, supporting the expectation of rate cuts by the year's end.

(With inputs from agencies.)