The U.S. added 114,000 jobs in July, below the average monthly gain of 215,000 over the prior 12 months, according to the latest data from the Bureau of Labor Statistics.
Markets reacted negatively to the news, with all three domestic indices down over 2% at around midday Friday.
The unemployment rate rose slightly, up 0.2% to 4.3%, as well as the number of unemployed people, up 352,000 to 7.2 million. Both measures are up from one year ago, when they were at 3.5% and 5.9 million, respectively
Job gains this month were led by healthcare, construction, and transportation and warehousing, while information saw losses.
Highlights of this month’s data include:
- Healthcare added 55,000 jobs in July, close in range to the average monthly gain of 63,000 over the prior 12 months. Employment specifically rose in home healthcare services (+22,000), hospitals (+20,000), and nursing and residential care facilities (+9,000).
- Construction employment grew by 25,000 jobs, higher than the average monthly gain of 19,000 over the prior 12 months. Specialty trade contractor employment continued its upward trend in July (+19,000).
- Transportation and warehousing added 14,000 jobs, now adding 119,000 jobs since the low seen in January of this year. Job gains were seen in couriers and messengers (+11,000) and warehousing and storage (+11,000). There was also a reported loss in transit and ground passenger transportation (-11,000).
- Social assistance also grew in July, by 9,000 jobs, but at a slower pace than the 23,000 average monthly gain over the prior 12 months.
- Government employment grew by 17,000 jobs. Employment growth in government has slowed in recent months, following larger job gains in 2023 and the first quarter of 2024.
- Information employment declined by 20,000 in July, but has changed little over the year.
- Employment showed little or no change over the month in mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; financial activities; professional and business services; leisure and hospitality; and other services.
- Average hourly earnings for all employees on private nonfarm payrolls increased by 0.2% to $35.07. Over the past 12 months, average hourly earnings have increased by 3.6%. Average hourly earnings of private-sector production and nonsupervisory employees increased by 0.3% to $30.14.
NAR Chief Economist Lawrence Yun stated that the lackluster report this month should push the Fed to cut rates in September, and might even precipitate a larger cut.
“The Fed was late moving away from the restrictive monetary policy stance when early signs of a softening economy were visible. Soft manufacturing survey data, falls in construction activity and damaging financing costs for small businesses clearly hint at a cooling economy and further cooling in inflation.
“The Fed may make a deeper cut of 50 basis points in September. The 30-year fixed mortgage rate looks to fall to 6.5% or even lower in the upcoming weeks. That is what the 10-year bond yield suggests, which plunged to 3.8% this morning, compared to 4.8% a few months ago. The 100-basis-point change in mortgage rates generally means around a $300 lower payment on a typical mortgage. Homebuyers who were priced out a few months ago should re-check whether they can enter the home-buying market if they have secure jobs.”
Realtor.com® Senior Economic Research Analyst Hannah Jones partially echoed this sentiment, but also added that it may be too soon to tell what the Fed’s actions will be.
“The job market has slackened in recent months, inspiring confidence that the Fed’s contractionary policy is having the intended effect. In this week’s FOMC meeting, Chair Powell emphasized the committee’s commitment to achieving 2% inflation but acknowledged recent progress. It is too soon to tell whether a rate cut may be on the table in September’s meeting. The committee will continue to lean on incoming economic data, and subsequent rate decisions will hinge on persistent cooling in both employment and inflation.”
Jones added that “despite affordability challenges, the still-strong labor market means that workers are in a good position to make housing decisions.”
