Olu Omodunbi, chief economist at Huntington Private Bank, said on “The Craman Countdown” that the jobs report points to a slowdown in the labor market.
Job growth slowed in July as many industries, including manufacturing, retail and trade, cut jobs.
Employer Added 114,000 jobs added in JulyThe Labor Department said in its monthly payroll report released Friday: LSEG economists had expected a rise of 175,000, but the unemployment rate rose slightly to 4.3%, the highest level since October 2021.
“We’ve been seeing yellow signals in labor market data for the past few months, but now that light is turning red,” said Nick Bunker, director of North American economic research at Indeed Hiring Lab. “As job gains weaken and become less prevalent, the rise in unemployment cannot be ignored.”
The health care sector had the largest payroll gains in July, adding 55,000 jobs. Home health services (21,600), hospitals (19,500), and nursing homes and residential care facilities (9,200) continued to see increases in employment.
July jobs report sparks reliable recession indicator
There was also a slight increase in the construction sector last month, with employment increasing by 25,000. The majority of these jobs were in specialised contractors (18,700).
Hiring in the leisure and hospitality sector was the third-largest contributor to major job gains last month. The industry added 23,000 workers in July. Nearly all of the gain, about 19,500, came from bars and restaurants. Hotels added more than 6,000 workers in July.
However, employment outside these sectors has been sluggish.
U.S. payrolls slow to 114,000 in July, unemployment unexpectedly rises
Elementary educators gather to speak with potential employees during a Prince George’s County School District recruiting event at Henry A. Wise Middle School in Upper Marlboro, Maryland, on August 2, 2023. ((Amanda Andrade Rose/Courtesy of The Washington Post via Getty Images) / Getty Images)
“The employment survey shows at least job growth, but the growth is clearly slowing,” Bunker said. “Job growth has also slowed, with the Business Diffusion Index falling below 50 in July, meaning fewer than half of industries added jobs in the month. Health care and social assistance may still be adding a significant number of jobs, but no one sector can sustain the expansion on its own.”
Other gains last month included employment in government (17,000), transportation and warehousing (14,000) and social assistance (9,000).
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Job losses occurred in several sectors of the economy last month.
The information industry lost 20,000 jobs, the financial services industry lost 4,000 jobs, and mining, logging, professional services and business services each lost 1,000 jobs.
