Executive summary
U.S. payrolls added 114,000 jobs in July, missing the consensus expectations of 180,000. Modest downward revisions lowered the prior two months by 29,000, taking the six-month average job gain to 193,800 (from 222,300 previously).
Signs of cooling were more evident in July, including an uptick in the unemployment rate, and a dip in both hourly earnings and hours worked. But, in a historical context, none of these are weak.
Alas, the July jobs report was disappointing. As we have noted, the U.S. economy is cooling but not weak, especially compared to pre-pandemic trends. That is especially so given noise within some of the economic data recently. Instead, we chalk it up to further normalization, albeit uneven. Accordingly, while we are concerned about the speed of the cooling, we aren’t panicked that a recession is imminent.
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