July Nonfarm Payrolls

July Nonfarm Payrolls
Updated: 07-Aug-26 09:21 ET

Highlights

The July employment report falls into the domain of "bad news is good news."
Participants are recognizing that nonfarm payroll growth was weak (actually, there was no growth), that wage inflation disinflated, and that the labor force participation rate continues to dwindle.

Key Factors

July nonfarm payrolls decreased by 23,000 (Briefing.com consensus: 86,000). The 3-month average for total nonfarm payrolls decreased to 20,000 from 77,000. June nonfarm payrolls revised to 20,000 from 57,000. May nonfarm payrolls revised to 63,000 from 129,000.
July private sector payrolls increased by 30,000 (Briefing.com consensus: 69,000). June private sector payrolls revised to 30,000 from 49,000. May private sector payrolls revised to 61,000 from 97,000.
July unemployment rate was 4.1% (Briefing.com consensus: 4.2%) versus 4.2% in June. Persons unemployed for 27 weeks or more accounted for 25.5% of the unemployed versus 27.3% in June. The U6 unemployment rate, which accounts for unemployed and underemployed workers, held steady at 7.9%.
July average hourly earnings were up 0.1% (Briefing.com consensus: 0.3%) on the heels of a 0.3% increase in June. Over the last 12 months, average hourly earnings have risen 3.2% versus 3.4% for the 12 months ending in June.
The average workweek in July was 34.3 hours (Briefing.com consensus: 34.3) versus 34.3 hours in June. The manufacturing workweek was unchanged at 40.4 hours. Factory overtime edged down 0.1 hour to 3.1 hours.
The labor force participation rate decreased to 61.4% from 61.5% in June.
The employment-population ratio decreased to 58.9% from 59.0% in June.

Big Picture

The key takeaway from the report is that it was soft enough, presumably, to keep Fed officials in a wait-and-see mode, such that they could see a better case now for not raising the target range for the fed funds rate at the September FOMC meeting.

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