The U.S. economy lost more jobs last month than expected amid a summer hiring slump, marking a sharp slowdown from the month before.
The U.S. economy lost 23,000 jobs in July, a sharp miss from economists’ expectations of a 90,000-job gain, according to a new jobs report released Friday by the Bureau of Labor Statistics.
“Frankly, it’s not good,” said CNN’s John Berman, “and significantly worse than expected.”
CNN senior reporter David Goldman agreed, saying the July figure marks a significant deterioration from June, when the economy added an already-weak 60,000 jobs.
The drop-off is stark when viewed against hiring trends of the past five years, Goldman added, pointing to a “significant clip” of job growth in 2022 and 2023 that has now reversed, with several months over the past year showing net job losses.
The unemployment rate ticked down to 4.1 percent, but Goldman cautioned that isn’t necessarily positive news.
“You usually don’t see the unemployment rate fall unless people are dropping out of the workforce,” he said, suggesting the decline may reflect discouraged workers exiting the labor market rather than genuine improvement.
Wages present another concern. Goldman said pay growth has fallen below the 3.5 percent inflation rate, reversing a longer stretch in which wages outpaced price increases. “Inflation is once again eating your paycheck,” he said.
Health care remained the one consistently strong hiring sector, but Goldman said “22,000 jobs is not going to cut it” given that nearly every other part of the economy is shedding positions.
The report immediately rattled markets, with bond rates falling as investors recalibrated expectations for the Federal Reserve. Goldman said the weak jobs data combined with elevated inflation leaves the Fed in a bind, with diminishing odds of an interest rate cut in September.
He described the market reaction as counterintuitive – falling odds of a rate cut were being read as a positive signal for investors, even though the underlying cause is labor-market weakness.
“That’s good news if you’re an investor,” Goldman said. “It’s not great news if you’re looking for a job right now.”
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