The U.S. labor market is showing signs of cooling off after the July numbers were the second weakest of the President Joe Biden era.
Before we get into the nitty-gritty, here are the basic numbers from the July non-farm payroll report:
The U.S. economy added 187,000 new jobs in July, falling short of economists’ expectations of 200,000.
The unemployment rate inched lower to 3.5 percent, down from 3.6 percent in June, under the market estimate of 3.6 percent.
Average hourly earnings were flat at 4.4 percent year-over-year, with wages at $33.74.
Average weekly hours slid to 34.3, while the labor force participation rate was unchanged at 62.6 percent.
Now, here is the most fascinating component of the July jobs report: downward revisions.
So far in 2023, every single month has seen the non-farm payroll numbers revised lower.
This included a June downward revision of 24,000 to 185,000 and a May downward revision of 25,000 to 281,000.
Here is a chart courtesy of Zero Hedge:
Some say this is an example of the Bureau of Labor Statistics fudging the numbers. Others say that this is normal considering the size of the job creation.
Who knows? But it is strange that it has been seven straight months of downward employment changes.
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