America's employment situation was worse than anticipated for a second straight month, with a surprise decline in July payrolls muting experts' expectations for a September interest-rate hike.
The Labor Department reported Friday that nonfarm payrolls (NFP) declined by 23,000 in July, versus Dow Jones-polled economists' expectations for growth of 95,000—what would've been a faster pace than June's initial reading of 57,000 jobs added. June's payrolls total was corrected lower, too, to 20,000 added, while May was revised down to 63,000 from 129,000 previously. Combined, June and May's totals came in more than 100,000 jobs shy of their prior readings.
"History doesn’t repeat, but sometimes it rhymes," says Lindsay Rosner, head of multi sector fixed income investing at Goldman Sachs Asset Management. "For the third time in as many years, July jobs data saw a mid-summer loss of momentum. While incoming inflation data will be the ultimate arbiter, slowing jobs growth helps support a September hold."
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The unemployment rate slipped to 4.1% against expectations for 4.2%, though that was likely in part also due to a slip in the labor force participation rate, from 61.5% in June to a new five-year low of 61.4% in July.
Average hourly earnings were marginally lower, at $37.62. On a year-over-year basis, that's 3.2% higher, which was below estimates of 3.5%.
July's weak nonfarm payrolls data came a day after the release of a disappointing ADP private payrolls report showing 44,000 jobs created last month, which was slower than June's 98,000 and missing expectations for 75,000.
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Here's a brief look at the July jobs report's most pertinent details:
- Jul payrolls: -23,000 (Est.: +95,000)
- Jul unemployment: 4.1% (Est.: 4.2%)
- Jul hourly earnings: +3.2% YoY (Est.: +3.5%)
- May payrolls (revised): +20,000 (Previously: +57,000)
- May payrolls (revised): +63,000 (Previously: +129,000)
This report will be updated.
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