The US non-farm payroll rose to just 73,000 in July, the weakest increase since October 2023.
The unemployment rate rose to 4.2%. Employment growth over the past three months has been limited to an average of 35,000 jobs. Labor participation rates also fell for the second consecutive month. Employment data based on the household survey pointed to a contraction in July.
Experts say the data points to the weakest employment growth since the start of the Covid-19 pandemic. In particular, despite reduced labor participation, rising unemployment rates underline the weakening of the labour market.
Average hourly revenues rose 0.3% per month in line with expectations, but an annual increase of 3.9% exceeded inflation. This shows the actual increase in the purchasing power of workers.
The economics commentary is divided. Optimists believe that despite tariffs partially affect prices, inflation remains under control and maintains a recovery in consumer confidence. Meanwhile, pessimists believe that spending is increasingly dependent on the wealthy for economic growth, especially among young people, and price sensitivity is increasing.
“Nearly every key indicator has been very stable since last fall,” said Guy Berger, a senior researcher at the Burning Glass Institute, showing a careful balance of the economy. However, Berger warns that this stability will not continue due to factors such as trade tariffs, immigration restrictions and new tax regulations.
The release of non-farm payroll data has led to a sharp re-re-kong in the US bond market. Hokish's statement from Fed Chairman Jerome Powell earlier this week saw expectations of interest rate cuts weaken, but those expectations quickly gained power after weaker employment data. Prices have begun to be priced for 114 basis point rate reductions over the next 12 months. The chances of rate reductions in September increased to 64%.
After the data, the market responded immediately. Spot Gold rose $38 per ounce in 15 minutes to $3,340. The US dollar index DXY fell more than 100 points to 99.11.
*This is not investment advice.
