Latest jobs report falls short of expectations

 August 5, 2023

The latest jobs report indicates that hiring has slowed down. 

The U.S. Department of Labor (DOL), through the Bureau of Labor Statistics (BLS), released its latest jobs report for the month of July 2023 on Friday.

Bad news

The report shows that the U.S. only added 187,000 jobs during July 2023. This is less than the roughly 200,000 jobs that experts, on average, were predicting that the U.S. economy would add during the month of July.

Forecasts, though, varied wildly. Some had predicted that the U.S. economy, during July, would see as many as 300,000 jobs added, while others predicted that as few as 150,000 jobs would be added.

So, the actual number - 187,000 - does come in above the lowest of the predictions. But, this figure is significantly below the average monthly increase that the U.S. has been witnessing over the past 12 months, which is an increase of 312,000 jobs per month.

The 187,000 jobs, according to the BLS, were added in the areas of health care, social assistance, financial activities, and wholesale trade.

More bad news

In addition to the jobs numbers for July 2023, the BLS also indicated that it is revising the numbers for the month of June 2023, specifically that it is revising them in the wrong direction.

The preliminary report put June 2023's job numbers at 209,000. But, in its latest publication, the BLS revised that number to 185,000.

That is 24,000 fewer than previously reported for the month of June 2023.

The unemployment rate

The BLS reports that "both the unemployment rate, at 3.5%, and the number of unemployed persons, at 5.8 million, changed little in July." The bureau adds that "the unemployment rate has ranged from 3.4% to 3.7% since March 2022."

In June 2023, the unemployment rate was 3.6%. So, July did witness a very slight decrease in that rate.

What now?

Fox Business reports that, despite the July 2023 jobs report, the Federal Reserve may still look to raise interest rates in order to meet the Biden administration's inflation target.

Fox Business notes:

Since 2022, the Federal Reserve has raised interest rates 11 times in an attempt to lower inflation down to a 2% target range. In recent months, inflation has shown signs of slowing down and economic growth has calmed some recession fears. But the state of the economy remains uncertain.

The outlet quotes Joel Kan, Mortgage Bankers Association (MBA) vice president and deputy chief economist, as saying:

The incoming economic data continue to convey conflicting signals about the strength of the economy. Indicators of manufacturing and service sector health remain lackluster, measures of inflation have moved lower, while GDP growth in the second quarter was stronger than expected and consumer spending remains resilient.

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