The U.S. labor market continued to regain ground in July, though at a slower pace, indicating the economic rebound is still making headway despite a surge in coronavirus infections.
Payrolls increased by 1.76 million in July, beating estimates for a 1.48 million gain and after a 4.79 million advance in June, according to data Friday from the Labor Department. The unemployment rate fell by more than expected, to 10.2%, while a broader gauge of joblessness also declined to 16.5%.
The data point to a labor market that's on the mend as the economy crawls its way back from the depths of a virus-induced recession. At the same time, the jobless rate remains high and the path forward will be uneven, with higher-frequency indicators turning more negative as businesses use up the last of their federal loans and reduced unemployment benefits pressure consumer spending.
"There is some moderation in the pace of job creation, naturally, as you get past the initial bounce in activity upon reopening," said Michelle Meyer, head of U.S. economics at Bank of America. "It's still a long road ahead in terms of fully recovering the labor market, but progress is being made."