According to data released today by the Bureau of Labor Statistics, total nonfarm payrolls declined by 23,000 jobs in July, well below market expectations for a gain of 80,000. Also, May and June job gains were revised 103,000 lower. Healthcare and social assistance led job gains (+22,600), followed by construction (+22,000), professional and business services (+18,000), and durable goods manufacturing (+18,000). Gains were offset by declines in government (-53,000), leisure and hospitality (-40,000), retail trade (-19,400), and financial activities (-14,000). The unemployment rate edged down to 4.1% from 4.2% last month, below market expectations of 4.2%. Meanwhile, the labor force participation rate continued its downward trend, declining to 61.4% from 61.5% in June, below market expectations of 61.6%.
The ABA Office of the Chief Economist views this month’s weaker-than-expected payroll report as suggesting some potential stagnation in labor market conditions. Despite the unemployment rate remaining relatively low, a moderation in labor market conditions could lead to a broader cooling in consumer credit performance.
