US Labor Market Falters: July Job Growth Drops to 73K, Unemployment Climbs to 4.2%
The US labor market displayed disturbing signs of frailty in the recent jobs report, with a mere 73,000 jobs added in July. This figure falls significantly short of the anticipated 100,000. In addition, the unemployment rate rose to 4.2% from June’s 4.1%. Furthermore, substantial downward revisions unveiled a job market that was considerably weaker than initially estimated.
The Bureau of Labor Statistics adjusted the job gains for May and June downwards by a combined total of 258,000. This adjustment brings the three-month average to a paltry 35,000 jobs, marking the weakest pace since the onset of the pandemic. Specifically, May’s job growth was drastically reduced from 144,000 to a mere 19,000, while June’s figures were revised from 147,000 to just 14,000.
Health care emerged as the leading sector for job gains, contributing 55,000 new positions and accounting for the majority of July’s growth. However, long-term unemployment saw an uptick, with the number of individuals out of work for 27 weeks or more reaching 1.82 million. The disappointing report led traders to heighten their expectations for Federal Reserve rate cuts, with the odds for a September cut escalating to 75.5%.
President Trump expressed his criticism of Fed Chair Jerome Powell on Truth Social, calling for immediate rate cuts in light of his administration’s expanding tariff policies.
Source: CNBC