Link Securities | According to data from the Department of Labor, the US economy added 73,000 non-farm jobs in July. The figure is well below the 115,000 jobs expected by the consensus of FactSet analysts. In addition, June’s job creation figure was sharply revised downward from an initial 147,000 jobs to just 14,000 jobs, and May’s figure was also revised downward by 125,000 jobs. Taken together, the May and June revisions mean that job creation in both months was 258,000 lower than initially reported, indicating that the US labour market may be cooling at a faster pace than initially anticipated. In July, 83,000 private jobs were created in the US, compared to a downwardly revised figure of 3,000 jobs in June and consensus forecasts of 120,000 jobs.
In July, employment continued to grow in healthcare (55,000 jobs), led by outpatient services (34,000) and hospitals (16,000). Job gains were also seen in social assistance (18,000). In addition, employment showed little change during the month in other major industries, including mining, construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, professional and business services, and leisure and hospitality. On the other hand, federal government employment continued to fall in July (down by 12,000 jobs) and has now fallen by 84,000 jobs since peaking in January.
Meanwhile, the US unemployment rate rose slightly to 4.2% in July, from 4.1% in June, in line with consensus expectations. The number of unemployed people increased by 221,000 to a total of 7.236 million, while employment fell by 260,000 to 163.106 million. The labour force contracted by 38,000 to 170.342 million. The labour participation rate fell by 0.1% to 62.2%, its lowest level since November 2022, while the employment-to-population ratio also fell by 0.1 p.p. to 59.6%, the weakest figure since December 2021.
In addition, average hourly earnings per worker increased in July by $0.12, or 0.3%, to $36.44, in line with market forecasts and following a 0.2% increase in the previous month. In July, average hourly earnings in private sector production and non-supervised jobs increased by $0.08, or 0.3%, to $31.34. Over the last 12 months, average hourly earnings rose by 3.9% in July, their biggest increase in four months, following June’s upwardly revised advance and exceeding market estimates of a 3.8% increase, which was also June’s year-on-year increase. Finally, it should be noted that the average number of hours worked per week increased in July by 0.1 hours to 34.3 hours, in line with FactSet’s consensus forecast.
