The Labor Department reported Friday that employers added 114,000 jobs in July, and the unemployment rate inched higher to 4.3%. It marked the highest level for the jobless rate since October 2021.’
Health care continued to lead the way in job creation, onboarding 55,000 new workers in July. Other sectors showing notable growth included construction (25,000), the government (17,000) and transportation and warehousing (14,000). However, there were some notable job losses last month. Information employment declined by 20,000 while financial activities shed 4,000 employees.
The report also showed modest revisions. Job gains for June were revised down by a total of 27,000 jobs to 179,000, the government said, while May’s gain also came in slightly lower at 216,000 jobs.
“The latest snapshot of the labor market is consistent with a slowdown, not necessarily a recession,” said Jeffrey Roach, chief economist at LPL Financial. “However, early warning signs suggest further weakness.”
The weaker-than-expected data also raises questions about whether the Federal Reserve has waited too long to cut interest rates. Policymakers voted at the conclusion of their two-day meeting on Wednesday to hold rates steady at a 23-year high, but signaled that they could start loosening policy as soon as September.
Investors are now increasingly betting on the odds of a 50-basis point cut in September amid signs that job growth is deteriorating.