Overview
- The Bureau of Labor Statistics reported Friday that payrolls fell by 23,000 in July and that May and June were revised down by a combined 103,000 jobs, a swing that materially weakens recent hiring estimates.
- The unemployment rate edged lower to 4.1% as the labor force shrank, a contrast that shows fewer people looking for work can mask weakening payroll trends.
- Job losses were concentrated in local government education and retail while health care added about 22,000 jobs and manufacturing rose by roughly 5,000.
- Average hourly earnings rose only modestly to $37.62 in July, up 3.2% year over year, leaving real pay growth below recent inflation readings.
- Financial markets cut odds of a near-term Fed hike and Treasury yields fell after the report, and policymakers now face a mixed signal between sticky inflation and softer employment that could alter the timing of future moves.