US job growth weaker than expected in July as unemployment rises
Source: AFP
US job growth missed expectations in July, government data showed Friday, while revisions to hiring figures in recent months brought them to the weakest levels since the Covid-19 pandemic.
The employment numbers point to risks in the key labor market as companies grapple with President Donald Trump's sweeping tariffs -- putting pressure on the central bank as it mulls the best time to cut interest rates.
The world's biggest economy added 73,000 jobs last month, while hiring numbers were revised significantly lower for May and June, the Labor Department said.
The jobless rate nudged up from 4.1 percent to 4.2 percent.
Experts have warned that private sector firms appear to be in a wait-and-see mode due to heightened uncertainty over Trump's rapidly changing trade policy.
With tariff levels climbing since the start of the year, both on imports from various countries and on sector-specific products such as steel, aluminum and autos, many firms have faced higher business costs.
Some are now passing them along partially to consumers.
On Friday, the Department of Labor said hiring numbers for May were revised down from 144,000 to 19,000. The figure for June was shifted from 147,000 to 14,000.
This was notably lower than job creation levels in recent years. During the pandemic, the economy lost jobs.
Average hourly learnings rose by 0.3 percent to $36.44 in July, the Labor Department said.
It added that employment continued rising in health care and in social assistance, while the federal government continued shedding jobs.
'Gamechanger'
"This is a gamechanger jobs report. The labor market is deteriorating quickly," said Heather Long, chief economist at the Navy Federal Credit Union.
She added in a note that of the growth in July, "75 percent of those jobs were in one sector: healthcare."
The US economy has added an average of just 35,000 jobs per month since May, data showed.
"This is not a healthy job market. The economy needs certainty soon on tariffs," Long said.
"The longer this tariff whiplash lasts, the more likely this weak hiring environment turns into layoffs," she added.
A sharp weakening in the labor market could push the Federal Reserve towards slashing interest rates sooner to shore up the economy.
On Friday, the two Fed officials who voted this week against the central bank's decision to keep rates unchanged for a fifth meeting warned against a "wait and see" approach.
Putting off an interest rate cut "could result in a deterioration in the labor market and a further slowing in economic growth," Fed Vice Chair for Supervision Michelle Bowman said in a statement.
Source: AFP
