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US nonfarm payrolls fell in July as revisions deepen labor weakness
Nonfarm payrolls dropped 23,000, while May and June were revised down by a combined 103,000, with hourly wage growth slowing to 0.1% month over month.
The US labor market signaled renewed weakness in July, with nonfarm payrolls falling 23,000 versus expectations for an 85,000 gain, according to Action Forex. The headline miss was reinforced by sizable revisions that cut prior-month payroll growth further.
May payroll growth was revised down from 129,000 to 63,000, and June was revised from 57,000 to 20,000, leaving combined employment gains 103,000 lower than previously reported. Action Forex said the July weakness was concentrated in local government education and retail trade, while health-care employment continued to rise.
Other report details were mixed, including an unexpected fall in the unemployment rate from 4.2% to 4.1%, but that decline coincided with another drop in labor force participation from 61.5% to 61.4%. The participation rate is down 0.7 percentage point since January, and the employment-population ratio has declined 0.5 point over the same period.
Average hourly earnings growth slowed sharply to 0.1% month over month from 0.3%, Action Forex reported, which paired with weaker hiring and falling participation to suggest labor deterioration is more pronounced than earlier estimates showed. The outlet added that the report should raise the hurdle for a September Fed rate hike.