Jobs report: U.S. economy adds 528,000 jobs in July, unemployment rate falls to 3.5%

The U.S. labor market remained red-hot in July despite expectations job growth would cool as tighter monetary conditions and company layoffs stoked fears of a recession.

The Labor Department released its latest monthly jobs report at 8:30 a.m. ET on Friday. Here were the key numbers from the report, compared to economist estimates compiled by Bloomberg:

Non-farm payrolls: +528,000 v.s 398,000 in June

Unemployment rate: 3.5% vs. 3.6% in June

Average hourly earnings, month-over-month: +0.5% vs. +0.4% in June

Average hourly earnings, year-over-year: +5.2% vs. +5.2% in June

This content is not available due to your privacy preferences.Update your settings here to see it.July's report marked a sharp jump from the prior month, which saw a payroll gain of 398,000 jobs added during the period and came in more than double what economists had expected. June's figure was upwardly revised from 372,000 initially reported.

The unemployment rate ticked back down to 3.5%, returning to February 2020's level before the coronavirus pandemic upended the U.S. and global economies.

According to the Bureau of Labor Statistics, total nonfarm employment has increased by 22 million from its low in April 2020 and has fully recovered to return to its pre-pandemic level.

At the industry level, services-based employers continued to lead gains in July as companies rushed to hire back workers laid off during the pandemic, with a return to in-person activities driving consumer demand. Employment in the leisure and hospitality industry jumped by 96,000 jobs last month, compared to an increase of 67,000 jobs in June.

Despite gains in the sector, which was among those hardest hit by COVID-related lockdowns, employment in leisure and hospitality remains at 1.2 million, or 7.1% from pre-pandemic figures.

Job gains in the professional and business services sector were also a standout in July's report with 89,000 jobs added last month. The increases bring employment in this area of the labor market to 986,000 higher than in February 2020, with most jobs added across management of companies and enterprises, computer systems design and related services, office administrative services, and scientific research and development services.

(This story is breaking. Please check back for updates.)

A "Now hiring" sign is displayed on the window of an IN-N-OUT fast food restaurant in Encinitas, California, U.S., May 9, 2022. REUTERS/Mike Blake—

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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