U.S. Job Growth Slows in July as Unemployment Rate Rises

The U.S. labor market showed signs of cooling in July, with nonfarm payrolls increasing by only 114,000, a sharp decline from June's revised figure of 179,000. This was well below the Dow Jones estimate of 185,000. The unemployment rate also rose to 4.3%, the highest since October 2021, indicating potential economic headwinds.

Certain sectors, however, showed resilience. Health care led the way with 55,000 new jobs, followed by construction (25,000), leisure and hospitality (23,000), and government (17,000). On the downside, the information services sector lost 20,000 jobs, reflecting an uneven economic landscape.

Average hourly earnings increased by 0.2% for the month and 3.6% year-over-year, both slightly below expectations. This easing in wage growth could influence the Federal Reserve's approach to interest rates.

The rise in the unemployment rate also brought attention to the Sahm Rule, suggesting potential recessionary signals as the three-month average unemployment rate edges higher.

Despite some anxiety over economic growth, Fed Chair Jerome Powell recently expressed confidence in the economy's resilience. However, with mixed economic data, the market remains cautious about potential rate cuts in the near future. As Clark Bellin, chief investment officer at Bellwether Wealth, noted, "It’s important for the Federal Reserve to stay ahead of any further labor market slowing by proceeding with its expected September rate cut." While the labor market remains relatively strong, the recent slowdown and rising unemployment rate signal a need for caution as economic conditions evolve.

Next
Next

New Building Inspection Program on the Horizon for NYC Condos and Co-ops