July jobs report expected to show a labor market slowing to a crawl
Hiring is expected to show a sharp slowdown in July, even as Federal Reserve policymakers insist the labor market is still in solid shape. Nonfarm payrolls likely grew by just 100,000 for the month, according to a Dow Jones consensus estimate. That would be the lowest gain since October 2024. Payrolls rose 147,000 in June and averaged 130,000 a month in the first half of the year. The unemployment rate also is expected to nudge up to 4.2% when the Bureau of Labor Statistics releases the report Friday at 8:30 a.m. ET. If the estimates are correct, it will reinforce the notion of a slowing jobs picture , though not necessarily one that will require a response from the Fed. “You do see a slowing in job creation, but also in a slowing, slowing in the supply of workers. So you’ve got a labor market that’s in balance,” Chair Jerome Powell said at a news conference Wednesday following the Fed’s policy meeting that saw it hold its benchmark interest rate where it’s been since December. “The labor market looks solid.” Aside from the headline number, markets will pore through the report for the source of hiring. For much of the post-Covid recovery, restaurant, health care and leisure and hospitality have provided the bulk of the gains. “What I’m really looking to is the breadth of employment gains across industries,” said John Velis, Americas macro strategist at BNY. “If you see cyclical industries continue to not generate jobs, and you see acyclical industries losing jobs, that’s a sign that the labor market is really weakening.” The monthly jobs reports have had a habit of surprising, primarily to the upside. That’s what TS Lombard expects to happen Friday. The firm said high-frequency data indicators from LinkUp point to a nonfarm payrolls number that could hit 199,000.
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