Summer jobs report is a double whammy for workers
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Newsletters Axios Local Show Axios Pro Axios Live The Axios Show Login Axios All topics Axios Search 1 hour ago - Economy Summertime job market remains muggy Courtenay Brown , Neil Irwin email (opens in new window) sms (opens in new window) facebook (opens in new window) twitter (opens in new window) linkedin (opens in new window) bluesky (opens in new window) Add Axios on Google Add Axios as your preferred source to
Add Axios on Google Data: Bureau of Labor Statistics ; Chart: Courtenay Brown/Axios America's labor market appeared to be gaining momentum this spring. The latest data makes that rebound look much less convincing.
Why it matters: The report isn't as bad as the headline suggests, but the broader picture is still one of a labor market that is less robust than it seemed.
What they're saying: "The stagnant summer air finally caught up with the labor market in July, as job growth slipped back into negative territory and confirmed that spring's optimism was built on shaky ground," Glassdoor chief economist Daniel Zhao wrote Friday morning.
By the numbers: The economy shed 23,000 jobs in July, the first negative month since February. Revisions dramatically weakened the recent jobs picture, wiping more than 100,000 payrolls from May and June.
Yes, but: The headline decline was heavily distorted by a 50,000 job drop in local government education.
Zoom out: Those jobs are likely more a statistical quirk than real loss. Yet even adding them back would not have been enough to adequately offset weakness elsewhere.
The big picture: The unemployment rate fell to 4.1% in July, the lowest jobless rate in a year. But that decline was largely for the wrong reason — people leaving the labor force rather than finding jobs.
There was one modest bright spot: After recent declines, a slightly larger share of prime-age Americans — those 25 to 54 — were working or looking for work in July, and a larger share had jobs.
Between the lines: The jobs report delivered a double whammy for consumers, with weakening hiring and wages failing to keep pace with inflation.
The soft jobs numbers lower the urgency of Fed rate hikes, giving officials who have been on the fence about whether to tighten policy more reason to wait.
With the jobless rate still in the zone of full employment, inflation dynamics are a more central concern in setting rates policy right now than the details of each month's jobs data.
The bottom line: "Today's weak payrolls print may ease the pressure on the Fed to raise rates at its September meeting, but next week's inflation data will still likely be the deciding factor," Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, wrote Friday in a client note.
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