U.S. Economy Unexpectedly Shed 23,000 Jobs in July

This all said, we ought to take into account the unwind of the World Cup festivities and Services last month. Restaurants lost -26K positions and Retail shed -19K jobs in July, which was partly made up for by +22K gains in Healthcare. Financial Services lost -14K positions, but the biggest loser was in Local Government Education (public school teachers, administrators, social workers), which dropped employment levels by -50K last month. This itself may be a temporary glitch, ahead of “back to school” economics here in August.

Wages only gained +0.1% for July, below the +0.3% expected, and +3.2% year over year — the worst performance since May 2021. Last month’s +3.5% was revised down -10 basis points (bps). Labor Force Participation came in at a paltry 61.4%, lows not seen in more than five years. This accounts for the lower Unemployment Rate, which otherwise seems at odds with monthly jobs losses.

The one silver lining here is that bond yields, which had been quietly marching upward in recent weeks, dropped suddenly on both the 10-year and 2-year, now at +4.62% and +4.17%, respectively — down 5 bps in seconds. This also gives the Fed a fresh reason not to raise interest rates when the FOMC reconvenes next month.

For Jobs Week overall, we saw slightly lower June JOLTS numbers, ADP private-sector jobs below estimates but still positive at +44K, Jobless Claims holding at near-60-year lows (with some underlying reasons not explained by a robust labor market) and today’s first negative print on BLS jobs in five months. And don’t forget the major downward revisions to previous months, which belie the notion that today’s miss was purely seasonal.

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