The July jobs report revealed only 73,000 payrolls were added, significantly below the expected 100,000. Revised totals for May and June showed drastic cuts, indicating an average gain of 35,000 over three months. Private sector hiring slowed to an average of 52,000, with stagnation in sectors outside health and education. Despite these warning signs, sectors like wages and hours worked still show improvement, suggesting broader economic expansion, although concerns about labor demand signaling recession persist.
Payrolls grew by just 73,000 last month, well below forecasts for about 100,000. Meanwhile, May's tally was cut from 144,000 to 19,000, and June's total was slashed from 147,000 to just 14,000, meaning the average gain over the past three months is now only 35,000.
We have consistently emphasized that a slide in labor demand of this magnitude is a recession warning signal. Firms normally maintain hiring gains through growth downshifts they perceive as transitory.
Hiring in the private sector has slowed to an average of just 52,000 in the last three months, with sectors outside health and education stagnating.
The weak jobs numbers do not mean there are mass layoffs. Other datasets like weekly jobless claims and monthly job-turnover surveys back that up. At the same time, wages and workweeks are still rising.
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