According to the new June jobs report also known as the Employment Situation Summary, released by the U.S. Bureau of Labor Statistics (BLS) for July, United States employers added 187,000 jobs, coming in below 200,000 jobs expectations that economists did forecast for July and also below the 209,000 jobs created in June. July’s gains were just 2,000 more than the jobs added in June
The 187,000 jobs report has created optimism by the Feds that the economy is on course to nail that elusive soft landing of lowering inflation without triggering a recession since the US job market cooled back down in July.
What is The US Jobs report?
The jobs report which is usually released on the first Friday of every month is based on surveys of households and employers. It usually estimates the number of people on payrolls in the United States economy, the average number of hours they worked weekly, as well as their average hourly earnings.
The jobs report provides estimates by state and metropolitan area, and by industry. The report also tallies the hours worked and earnings of production and non-supervisory employees.
What are Economists Saying?
Economists believe that this report is the lowest monthly gain and the rate is just above the lowest level since late 1969 excluding the losses seen during the first year of the pandemic. That being said, July month’s jobs still outpace the pre-pandemic average.
Economists see this as a tug of war between the labor market and the economy, there is still a push and pull, and the labor market remains strong. The job growth is slowing, but they don’t think that’s necessarily a bad thing. In some ways this is great. The country is beginning to see the soft landing that the Feds are hoping for.
Summary of the July Jobs Report
The unemployment rate ticked down to 3.5% from 3.6% the month before, according to the report. The overall labor force participation rate was unchanged for the fourth consecutive month at 62.6%, but more women are working than ever before. The unemployment rate for Blacks moved lower to 5.8% while the rate for adult women nudged higher to 2.7%. The rate for Asians tumbled to 2.3%
The US gained 187,000 jobs in July and 30% of all that was government jobs. Health care, social assistance, financial activities, and wholesale trade were the leading sectors for job creation.
- Gov +15,000
- Healthcare +63,000
- Social assist +24,000
- Construction +23,000
- Biz +21,000
- Hospitality +17,000
- financial activities +19,000
How will the Fed react to the June jobs report?
July job gains were in moderate while wage growth remained firm, showing a strong enough labor market to keep the Federal Reserve on track to raise interest rates this month. The Fed is likely to reconsider its series of rate hikes following this jobs report.
But parts of the report, including weaker-than-expected wage numbers, have reduced fears that the Fed may have reason to resume hiking later this month. Average hourly earnings increased by 0.4% in July. Meanwhile, the unemployment rate declined from 3.6% in June.
How Investors are reacting
According to economic analysts, stocks fell on Friday, and finished lower for the week, as Wall Street struggled to shake off fears that the Federal Reserve may start hiking rates again later this month. Investors are hoping next week’s release of the June consumer price index on Wednesday, as well as last month’s producer price index on Thursday, will hopefully indicate a downward trajectory in inflation after this week’s strong ADP data spurred investor fears of further rate hikes ahead.
Investors are turning their attention to inflation data in the week ahead, following this week’s hot jobs data, to further clarify the path of future monetary policy. Others warned the Fed’s actions could still harm the economy. “While these numbers are positive, there’s still reason to worry that the Fed’s actions including resuming rate hikes in July could hurt the labor market.
