This year’s job creation momentum melted in the July heat like a popsicle thirty seconds after you take it out of the cooler. The US lost 23,000 jobs last month, according to government data released yesterday. This surprised analysts, who expected a gain of 100,000 positions. So, where did hiring happen (or not) last month? - Restaurants and bars had 26,000 fewer employees, despite the boost they got from the World Cup. Fewer staff members at big-box stores led to a loss of 19,000 retail jobs. Finance shed 14,000 jobs. And public school headcount dropped by 50,000, which some economists said is typical when school is out.
- On the plus side: Healthcare continued to be the hiring headliner, adding 22,000 jobs. Construction and manufacturing sectors together gained 27,000 positions, likely thanks to the data center buildout.
Meanwhile…unemployment dropped to its lowest level since 2025—but clearly not because of an offer-letter boom. Over 260,000 people ditched the labor market last month, driving down the unemployment rate, which doesn’t count anyone who isn’t looking for work. The share of employment-eligible Americans working or job hunting is now at its lowest level since the pandemic. Uncle Sam’s statisticians also delivered another downer, revising the number of jobs created in the previous two months downward by 103,000. Warsh watchIf you’re keeping score at home: The trading odds of the Fed hiking rates at its next meeting in September plummeted in the wake of the lackluster jobs report—which also showed yearly wage growth slowing to 3.2%, which is a five-year low. But…if next week’s inflation report shows consumer price increases outpacing wage growth, that would complicate the Fed’s balancing act of fighting inflation and keeping the economy chugging along. Big picture: Many economists see the latest jobs stats as a sign of a slowing economy amid the Iran war, which is pushing up energy prices. However, there’s some reason for optimism, like the recent private sector data showing strong small business hiring plans and bigger pay gains for those switching jobs.—SK |
