US jobs growth beat forecasts in July but still slowed significantly on the previous month amid a resurgence in new coronavirus (COVID-19) infections, more evidence that the recovery of the world's biggest economy from the recession caused by the pandemic is faltering.
July non-farm payrolls (NFP) increased by 1.763 million, a sharp fall from the record 4.791 million posted in June - which was a slight revision from the 4.80 mlllion original figure - but that was above the 1.58 million consensus forecast. It still leaves US jobs around 13 million below their pre-pandemic level, with employment having peaked at 152.5 million in February.
The unemployment rate declined to 10.2% from 11.1% in June.
Naeem Aslam, chief market analyst at AvaTrade commented: "The US NFP was simply fabulous, it is clear that the economic data isn’t rolling over—it is moving in the right direction. The US unemployment rate fell even further and this is good news for Donald Trump.
"The biggest question is that what this number means for the US policymakers who are likely to miss their own defined deadline today. But given the data, it is probable that policymakers may not provide a massive stimulus package which Democrats have been fighting for."
He added: "The strong US jobs pushed the gold price lower initially, as the data confirmed that things have not become worse. But any weakness in the gold price is an opportunity because when we zoom out and look at the overall economy, there is still ample weakness. The path to recovery is long and full with obstacles which is likely to support the gold price."
The report could pile pressure on the White House and Congress to speed up negotiations on another aid package. Talks have been dragging over differences on major issues including the size of a government benefit for tens of millions of unemployed workers.
A $600 weekly unemployment benefit supplement expired last Friday, while thousands of businesses have burned through loans offered by the government to help with wages. Economists estimate the Paycheck Protection Program that gave businesses loans that can be partially forgiven if used for employee pay saved around 1.3 million jobs at its peak.
The extra $600 weekly unemployment checks made up 20% of personal income and helped to boost consumer spending in May and June.
-- Updates with figures, comment --