U.S. employers added 164,000 jobs in July and the unemployment charge held regular at three.7%. Jeff Sparshott and Greg Ip right here to take you thru at this time’s numbers.

Beneath the Floor, a Sharper Slowdown

Common job progress slowed to 140,000 during the last three months, nonetheless fairly strong and effectively above demographically-determined long-run progress. Beneath the floor, the slowdown appears to be like sharper. The common workweek shrank as producers minimize extra time. Complete hours labored by non-managerial workers haven’t grown since January and are up zero.7% from a 12 months earlier, the slowest since 2010. This appears to be like quite a bit like 2016 when Federal Reserve tightening, a China devaluation and plunging oil costs slammed manufacturing worldwide. This shock, pushed by commerce battle and a slowing China, may equally show non permanent. However the Fed must be prepared for one thing extra critical. —Greg Ip

KEY THEMES

Chilly Consolation

For the Federal Reserve, the July jobs report affords some consolation. However most likely not sufficient to offset worries over escalating commerce tensions, Nick Timiraos writes.

The Fed minimize its benchmark charge by 1 / 4 proportion level on Wednesday, citing worries about international progress, commerce and muted inflation. Chairman Jerome Powell left the door open to a different minimize later this 12 months.
Look no additional than President Trump’s shock resolution on Thursday to impose 10% tariffs on $300 billion in Chinese language items to grasp why the Fed minimize—and why it might be tougher to make use of backward-looking financial indicators like the roles report to find out the Fed’s subsequent strikes.
“I’d love to be extra exact” concerning the financial outlook, Mr. Powell stated on Wednesday. “However with commerce it’s a issue that we now have to evaluate in form of a brand new approach.”
Traders largely anticipate the Fed will comply with this week’s charge minimize with one other at its subsequent assembly, Sept. 17-18.

What’s My Elevate?

The opposite large story for the Fed this 12 months has been tepid worth pressures. Within the U.S., wage progress has outpaced inflation however proven indicators of petering out. Hourly wages rose three.2% from a 12 months earlier in July, down from a latest excessive of three.four% in February. Usually when the economic system has been increasing for a few years, officers may anticipate hiring to gradual as a result of there are fewer staff to attract off the sidelines. However the latest cooling of wage progress raises doubts over whether or not that’s taking place now. —Nick Timiraos

Measures of Well being

One of many vibrant spots in Friday’s report: The broadest measure of unemployment, which incorporates individuals who’ve stopped looking for work in addition to part-time staff who need a full-time job, fell to 7.zero% final month. That was the bottom degree since late 2000 and an indication that the robust labor market continues to tug extra People off the sidelines. —Harriet Torry

Different key measures of labor-market well being have been combined. The labor-force participation and employment-to-population ratio for staff age 25 to 54 peaked early in 2019 and have since tailed off. The economic system is drawing extra individuals in, however not these of their prime working years.

One blight on Friday’s report: Downward revisions made knowledge for the 2 earlier months much less rosy. June payrolls progress was revised right down to 193,000 from an preliminary estimate of 224,000, whereas Might was revised right down to 62,000 from a previous estimate of 72,000. The economic system is including a median of 140,000 jobs a month over the previous three months. A 12 months earlier, the tempo was 237,000.

Items vs. Providers

One evolving theme throughout the labor market this 12 months: the divergence between goods-producing and service-providing sectors of the economic system. Mining, manufacturing and development have been hit by an array of things, together with cutbacks within the power business and a trade-related pullback in enterprise funding. That has held again job creation: From January to July in 2018, goods-producing employers added 414,000 jobs. To date this 12 months it has been solely 160,000, down 61%. The service sector, extra insulated from international turmoil, commodity costs and different outdoors variables, has seen a a lot milder slowdown.

Whereas factories get all of the love, the retail business employs extra individuals: 15.eight million in contrast with 12.9 million. And it is one section of the service sector that hasn’t been doing effectively, with six straight months of job losses.

What Economists and Analysts Are Saying Concerning the Jobs Report

“The labor market enlargement has shifted down this 12 months however continues to be spectacular provided that it’s in its 10th 12 months of uninterrupted progress.” —Sophia Koropeckyj, Moody’s Analytics

“The economic system appears to be cooling relative to earlier within the enlargement, however these figures replicate a rising economic system, not one that’s in, or getting ready to, decline.” —Beth Akers, Manhattan Institute

“For all the priority over weak international progress and commerce coverage, the home economic system continues to be holding up moderately effectively.” —Andrew Hunter, Capital Economics

“Job progress continued to gradual, and is now lower than three-quarters of what it was on common at this level final 12 months. That being stated, job progress isn’t at a degree that ought to trigger concern for jobseekers. The economic system continues to be increasing, simply at a slower tempo.” —Martha Gimbel, Certainly Hiring Lab

“We will throw it out the window with the prospect of the brand new tariffs.” —Peter Boockvar, Bleakley Advisory Group

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