US Jobs Report Crushes Expectations: Nonfarm Payrolls Fall Short
The US employment report for July revealed a major disappointment in job growth, with nonfarm payrolls (NFP) declining by 23 thousand. This is well below the market estimate of a gain of 80 thousand and weaker than the downwardly revised June figure of 20 thousand.
The unemployment rate fell slightly to 4.1%, down from 4.2% in May, which matched the market expectation. However, wage growth weakened to 3.2% year-on-year, down from a downwardly revised 3.4% in June and below the market estimate of 3.5%.
The decline in NFP and weakening wage growth are warning signs of widening cracks in the labor market. Employers are showing more caution about hiring due to uncertainty over US tariff policy and the ongoing war with Iran, which is fueling higher energy prices.