The July 2022 US employment report surprised to the upside and depicts a labor market that is still very tight. Nonfarm payrolls rose 528,000, more than double the consensus forecast. The unemployment rate ticked down to 3.5 percent, matching the low seen in the robust pre-pandemic labor market. Average hourly earnings rose by 5.2 percent over the 12 months ending in July. Over the past 3 months—and adjusted for compositional shifts in the pool of workers—earnings also rose at an annual rate of 5.2 percent, up from 4.5 percent last month. These wage readings are well above what would be consistent with the Fed’s ... (full story)