Catherwood LibraryILR School

The U.S. added only 114,000 jobs in July, significantly below expectations, according to the Labor Department's recent report. This sharp decline, coupled with a rise in the unemployment rate to 4.3%, has heightened fears of a broader economic slowdown. The average monthly job gains over the past year were much higher, and revisions for May and June reduced job additions by 29,000. Wage growth also slowed, with average wages rising 3.6% in July compared to 3.9% in June, potentially affecting consumer spending, the economy's primary driver. The report coincided with a pessimistic manufacturing survey, showing declines in new orders and factory output, triggering a stock market selloff. While some sectors like construction continued to hire, others, such as the information sector, saw significant job losses. Concerns are mounting that the Federal Reserve's prolonged high-interest rates to curb inflation might be contributing to the slowdown. The central bank may consider cutting rates more aggressively in its next meeting. Despite the negative trends, the report noted some caveats: Hurricane Beryl's landfall during the data collection period may have caused temporary job losses, and a surge of 420,000 new or returning workers increased the unemployment rate. The labor force participation rate also reached its highest level since 2001. The Fed will review more employment and inflation data before its September meeting to decide on rate adjustments.