Amid ominous market signals of a slowdown in economic momentum, the Bureau of Labor Statistics Employment Situation Summary (BLS) data suggests that the economy is still adding jobs but at a more subdued rate.
The BLS reported a gain of 114,000 jobs in July, lower than the average monthly gain of 215,000 over the prior 12 months. Analysts’ estimates had forecasted gains of about 175,000. Of note, the BLS revised down June job gains by 27,000 from +206,000 to +179,000 jobs. Economists at JPMorgan Chase had estimated that Beryl might reduce July’s job count by 20,000 to 30,000, with a corresponding bounce back in August.
Adding further indications of gradual slowing in hiring activity, the unemployment rate jumped by 0.2 percentage point to 4.3 percent in July.
“If the Fed was going to manufacture the soft landing, this is probably what it was going to look like,” said Mike Reynolds, vice president of investment strategy at Glenmede. “You’re seeing just modest on-the-margin weakness in the labor market that isn’t likely to spiral out of control into a negative feedback loop,” noted CNBC reporter Jeff Cox.
As reported in the Wall Street Journal, adding more color to today’s report Ernie Tedeschi, director of economics at the Budget Lab at Yale University reckons the recent data are consistent with an economy that is at full employment—one when there are fewer gains to be had than a year ago, when many employers were still struggling to find workers. “In one sense, that is a positive story,” he said. “In another sense, it should make us even more attuned to the risks involved. For now, he said he isn’t too worried. But if there were signs of sharp deterioration—a significant increase in the number of people filing unemployment claims, say, or a drop in the share of people in their prime working years who are employed—he would be.
Key industries reported the following trends in July:
Healthcare added 55,000 jobs in July, similar to the average monthly gain of 63,000 over the prior 12 months. In July, employment rose in home healthcare services (+22,000), hospitals (+20,000), and nursing and residential care facilities (+9,000).
Employment continued to trend up in construction in July (+25,000), in line with the average monthly gain over the prior 12 months (+19,000). Employment in specialty trade contractors continued its upward trend in July (+19,000).
In July, employment continued to trend up in transportation and warehousing. This sector has added 119,000 jobs since a recent low in January of this year.
Government employment was little changed in July (+17,000). Employment growth in government has slowed in recent months, following larger job gains in 2023 and the first quarter of 2024.
Information employment declined by 20,000 in July but has changed little over the year.
Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; financial activities; professional and business services; leisure and hospitality; and other services.