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US job growth slowed sharply last month and employment in the preceding two months was worse than previously thought, new data showed, fueling fears of economic uncertainty driven by Washington’s protectionism.
Overall, the US added 73,000 jobs in July, below the 100,000 expected by economists surveyed by The Wall Street Journal, while revisions to data from May and June showed that the country added 258,000 fewer jobs than previously thought — much steeper than typical after-the-fact data tweaks.
The numbers cast doubt on the Federal Reserve’s decision not to cut interest rates this week and hand ammunition to President Donald Trump in his pressure campaign against its chair, Jerome Powell. Two Fed governors dissented from the decision on Wednesday, and one of them, Christopher Waller, had warned two weeks ago that the job market was weaker than it looked and “near stall speed.” Almost 90% of jobs the US economy was thought to have added in May and June were revised away.
“Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW. IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!,” Trump wrote on social media Friday.
Stock markets extended losses on the news, while bond prices rose. Traders also increased their bets that the Fed will cut interest rates when policymakers next meet in September.
Hours after the jobs report Friday, Trump said he had directed his team to fire the commissioner of the Bureau of Labor Statistics, a
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The numbers are troubling on closer look. A large share of the new jobs created were in the health care and social services sectors, which tend to do well even if the economy isn’t.
The report lands on the day Trump’s tariffs are set to go into effect and further cloud the economic picture. One view is of a surprisingly resilient economy with wage growth outpacing inflation, improving consumer sentiment, and strong business investment. The other shows pockets of weakness, with much economic activity being driven by wealthier Americans.
Conflicting signals have been filtered through partisan lenses that are internally inconsistent. Trump’s supporters point to a strong economy, boosted by the promise of tax cuts and domestic manufacturing, while still demanding interest-rate cuts — a playbook fix for an ailing economy.
Notable
- “Would I have cut? Yes,” BlackRock executive Rick Rieder told Bloomberg.
- The headline jobs number isn’t as bad as it looks because immigration has fallen, Harvard economist Jason Furman notes, “but the bigger [issue] is the slowdown in private job creation.”