Episode summary
Instant Reaction: Employers Unexpectedly Shed Jobs; Unemployment Rate Falls | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Tom Keene, Damian Sassower, Carol Massar, Tim Stenovec · Guests: Claudia Sahm, Constance Hunter, Kristina Campmany, Andrew Hollenhorst, Stephanie Roth
Summary
The July jobs report surprised to the downside, with nonfarm payrolls falling 23,000 after large downward revisions to May and June. The unemployment rate dipped to 4.1%, but that came alongside a lower labor-force participation rate and softer wage growth, pointing to a labor market that is weaker than it first appeared. The discussion centered on whether the decline reflects real deterioration or seasonal noise, especially in summer education payrolls and other adjustment quirks.
The economists agreed the immediate policy signal is clearer than the headline employment number: the report makes a September Fed rate hike look much less likely and supports a hold. Several argued that the labor market is not overheating, wages are not putting upward pressure on inflation, and the Fed can wait for next week’s CPI before making any move.
At the same time, the panel stressed that the broader issue is structural, not just cyclical. They pointed to aging demographics, slower labor-force growth, AI, tight credit spreads, and a widening divide between workers who already have jobs and those trying to enter the market. Markets responded with lower front-end yields and a bid for risk assets, while the panel said inflation will still be the decisive data point.
Key takeaways
- The report showed a 23,000-job decline in July and a two-month downward revision of 103,000, sharply reducing the average pace of hiring.
- The unemployment rate fell to 4.1%, but the panel said the drop was driven by lower participation, not a healthier labor market.
- Several economists said the data make a September Fed hike unlikely and strengthen the case for staying on hold.
- Soft wage growth was treated as the key policy signal because it suggests the labor market is not feeding inflation.
- The panel argued that aging demographics, AI and fiscal imbalances are now bigger long-run questions than one monthly payroll print.
Notable quotes
“The economy losing 23,000 jobs in the month of July. The expectation was for an addition of 80,000”
“I don't want to call this a nothing burger by any stretch”
“That is not a robust labor market situation”
How the episode opens
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Bloomberg Audio Studios, podcasts, radio, news. — This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world.
And the July jobs report crossing the Bloomberg terminal right now. And it shows that the US economy actually lost 23,000 jobs in the month of July. This is a lot less than the 80,000 we were expecting to be added.
We added 57,000 in the month of June. Moving to the unemployment rate, it dipped to 4.1% versus the prior month's 4.2%. The expectation was for 4.2%.
Labor force participation rate coming in at 61.4%. Uh the month before it was 61.5% and that's a bit lower than the expectation. We want to move over to the wage component here, which provides more clues on inflation.
Average hourly earnings month overmonth up just a tenth of a percent. A scant tenth of a percent. Average hourly earnings year-over-year up 3.2%.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- unemployment rate
- nonfarm payrolls
- labor force participation
- wage growth
- labor market revisions
Companies and tickers mentioned
- IVZ
- C
- New Century Advisors
- Economist Intelligence Unit
- Invesco
- Citi
- Wolfe Research
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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