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July jobs report ‘affirms a cooldown, rather than collapse’
New data from the Bureau of Labor Statistics revealed 187,000 jobs were added in July, with a decrease in the unemployment rate to 3.5 percent. NAFCU Economist Noah Yosif breaks down the report in a new Macro Data Flash.
“While headline numbers were below-consensus, the July jobs report affirms a cooldown, rather than collapse, in the labor market against rising interest rates and tightening economic conditions,” said Yosif. “The unemployment rate trended down to 3.5 percent, new job openings exhibited modest deceleration, and average hourly earnings remained unchanged, but at historically low levels of growth, suggestive that the labor market is losing momentum at a healthy pace."
“These trends offer further support for the possibility of a soft-landing, which will require the Fed to synchronize its timing on monetary policy with the pace of deceleration in the labor market,” Yosif concluded.
Results among private sector industries were mostly positive. Education and health saw the largest gains (+106,000), followed by finance (+19,000), and leisure and hospitality (+17,000). However, the government shed 9,000 jobs.
Average hourly earnings grew 0.4 percent in July, bringing year-over-year wage growth to 4.4 percent.
For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU’s Macro Data Flash reports.