Powell's fecklessness is plain for all to see as job numbers tank

If only someone had suggested cutting interest rates

U.S. employers added just 73,000 jobs in July, falling sharply below expectations and signaling a cooling labor market, as the unemployment rate held steady at 4.2%, the Labor Department reported Friday.

The U.S. economy added only 73,000 jobs in July 2025, significantly underperforming the Dow Jones consensus estimate of 100,000, according to a CNBC report citing the Bureau of Labor Statistics. This marked a notable slowdown from prior months, with revised figures showing May’s job growth slashed from 144,000 to 19,000 and June’s from 147,000 to 14,000, indicating a combined 258,000 fewer jobs than previously reported. The unemployment rate remained steady at 4.2%, aligning with recent trends since May 2024, while the labor force participation rate showed little change.

Despite the weak headline number, certain sectors showed resilience. Health care led job gains, adding 55,000 positions, above its 12-month average of 42,000, with growth in ambulatory services and hospitals. Social assistance added 18,000 jobs, driven by individual and family services. However, federal government employment continued to decline, losing 12,000 jobs in July, part of an 84,000 drop since January, attributed to efforts by the Department of Government Efficiency to reduce public sector payrolls. Manufacturing maintained stable workweeks, though overtime slightly decreased.

Wage growth was modest, with average hourly earnings rising 0.2% month-over-month and 3.7% year-over-year, suggesting minimal inflationary pressure from wages. The average workweek for private nonfarm employees edged up to 33.7 hours. The report highlighted a 275,000 increase in new labor market entrants, raising the number of unemployed seeking their first job to 985,000. Discouraged workers, who believe no jobs are available, fell by 212,000 to 425,000.

Market reactions were swift, with the CME Group’s FedWatch tool indicating a 66% probability of a 0.25% interest rate cut by the Federal Reserve in September, reversing earlier expectations of sustained high rates. The disappointing jobs data, coupled with downward revisions, heightened concerns about economic slowdown, especially amid ongoing tariff policies and federal workforce reductions. Analysts noted the labor market’s resilience was waning, though sectors like health care continued to bolster employment. The report underscored a complex economic landscape, with investors and policymakers eyeing the Federal Reserve’s next moves as the labor market showed signs of strain. The Employment Situation for August is set for release on September 5, 2025.