Quick Facts:
- Total nonfarm payroll employment increased by 187,000 in July.
- The federal unemployment rate dropped by 0.1 percentage point to 3.5 percent.
- Job gains occurred in health care, social assistance, financial activities, and wholesale trade.
- The unemployment rate has ranged from 3.4 percent to 3.7 percent since March 2022.
- The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.2 million in July.
Looking Forward:
- As overall job gains slowed, the labor market remains healthy (albeit perhaps too warm for the Federal Reserve’s liking) Wages picked up at a higher rate than forecast, with a 4.4% increase from the year-ago period. The unemployment rate fell and remains near the lowest in decades. Participation remained at 62.6% for the fifth straight month.
- There were signs of cooling throughout the report, though: Temporary help services continued their slide, average hours worked ticked down, and some categories that led the boom in job growth in the post-pandemic period continue to cool, including manufacturing and transportation/warehousing.
- One less-than-friendly aspect of the employment data was the downward revision to the June figure. This means that every single payroll release in the first half of the year has been revised lower. That is the longest streak of downward revisions since the Global Financial Crisis, and funny enough comes after a streak of six upward revisions in the second half of last year.
- It seems like most analysts are in agreement that the labor market is slowing down and will probably continue to do so. Less clear is how meaningful the decline so far will be for the Fed and inflation debate.
Source: U.S. Bureau of Labor Statistics
