US economy shed 23,000 jobs in July, economists forecasted gain of 80K

00:00 Julie

should be coming out right about now. 30 year holding it.

00:02 Julie

Negative 23,000, a drop of 23,000 jobs in the month of July. Not only that, the prior month, the month of June being revised lower to 20,000 from 57,000. So that two-month payroll net revision down by 103,000. Uh, manufacturing payroll is actually growing more than expected by 5,000 versus the 4,000 that was expected and uh actually being revised higher in June to 11,000 from 3,000. So strong manufacturing picture, not strong, um ex manufacturing. Average hourly earnings ticking up less than estimated, only by a 10th of 1%. Average hourly earnings on a year-over-year basis up 3.2%, and the labor force participation rate going down, not up to 61.4%. The unemployment rate coming in also ticking down perhaps because we’ve got that decrease in labor force participation. 4.1% the reading on the unemployment rate. That is a 10th of a percent better than estimated and a 10th of a percent lower than the prior month. So pretty surprising here in a number of different ways, Jake.

01:03 Jake

That’s right, and far below what any economist had predicted. The lowest range we saw coming into this was looking for an ad of 47,000 jobs. We just got a loss on the month. Over in the bond market, we see twos at holding at 415, 10s, 460, 30 year at 519. It started right before the print 521 coming off that level a little bit, as the market says, I think, Julie,

01:25 Jake

Maybe we don’t need a hike as immediately.

01:28 Jake

Maybe this gives Kevin Warsh a little bit of breathing room.

01:31 Julie

Maybe it does. Um I just want to break down some of the different sectors within employment here to see what the trends um look like. Employment in local government education down by 50,000 here, so that’s something to keep in mind. Retail down by 19,000. Uh we also saw employment as a subset of that, declining at warehouse clubs, super centers and other general merchandise retailers. Financial activities also down by 14,000. That was because of losses in credit intermediation and related activities, as well as insurance. Um healthcare continuing its strength up 22,000. It is a bit of a slower pace than we have seen before, but that really has been healthcare has been employment has been the thing that has been pulling everything else along.

02:12 Jake

And it confirms what we got earlier this week with the ADP private data where we saw pay healthcare payrolls really pulling ahead in that services sector like we’ve been seeing for the past call it year.

02:20 Julie

Yeah. So interesting stuff here throughout the report.