In July, the US labor market recorded its slowest pace of new job creation in almost 15 years, except for the pandemic period. Only 73,000 jobs were added, well below analysts' projection of 115,000. Revising data for May and June revealed a total decrease of 250,000 jobs. Experts had long signaled a cooling labor market.
The US statistical methodology involves an initial estimate that is subsequently revised, as not all employers submit reports promptly. However, the scale of the July slowdown this year was unexpected. The dismissal of the US Bureau of Labor Statistics chief following accusations of data manipulation ignited criticism, even within the Republican Party, due to concerns about undermined trust in independent statistics.
Expectations for August point to an increase of only 75,000–80,000 jobs, with the labor market remaining sluggish. These trends may impact future Federal Reserve decisions on interest rates amid growing business uncertainty.
Official unemployment hovers near 4.2%, but job creation is slowing. Compared to last year, the average growth has dropped from over 150,000 to 85,000 jobs per month. Contributing factors include fewer working-age people due to retirements, reduced migration flows, and stricter trade restrictions.
Hiring rates are stagnant, new job openings are limited, and mass layoffs are rare. For the first time since 2020, job openings fell below the number of job seekers. In August, nearly 86,000 layoffs were announced—the highest since the Great Recession.
Statistical data may be inaccurate due to reporting delays and initial optimism in estimates. Most new jobs are in health care. Manufacturing, retail, and professional services may see declines, and stagnation is expected in transport and IT.
Wage growth in the US has slowed: in August, year-on-year growth is expected at 3.7%, lower than earlier data. Taking inflation into account, real incomes may decrease. Investors expect the Federal Reserve to cut rates in September, but stronger figures on pay or employment could prompt a reassessment.
