US Jobs Market Shows Surprise Decline as Summer Slowdown Continues

The US jobs market has shown a surprise decline in employment last month, contrary to analysts' predictions. According to official figures from the Bureau of Labour Statistics, the economy created only 23,000 fewer jobs than expected, with a total of 80,000 jobs added being predicted.

These numbers are significant because they indicate that the summer months have seen slower job creation than previously thought. The Bureau has also revised down the number of jobs added in May and June by 103,000.

Nancy Vanden Houten, lead economist at Oxford Economics, noted that expectations of interest rates being raised had been 'scaled back' since the decision last month. Analysts had expected an uptick in job creation, but the actual numbers may reduce pressure on the Federal Reserve to raise interest rates next month.

The unemployment rate has actually dipped to 4.1 per cent from 4.2pc due to a decline in the number of people in work or looking for work. Average hourly earnings rose by 3.2pc in the year to July, compared with the 3.5pc economists expected.

Chief investment officer Neil Birrell noted that labour force participation is back at levels not seen since the days of Covid, meaning jobs just aren't being created. This weak job market could provide a read across to growth at a time when inflation is a problem.