Institutional comments on July non-farm payroll figures: unexpectedly, employment figures have cooled significantly, will the door to a September interest rate cut be reopened?
2025-08-01 21:04:38
U.S. job growth slowed more-than-expected in July, while data for the previous month was revised sharply downward, pointing to a significant cooling in the labor market.
The U.S. Bureau of Labor Statistics released its nonfarm payrolls report on Friday, showing nonfarm payrolls increased by 73,000 jobs in July. Economists polled by Reuters had forecast a gain of 110,000 jobs in July. The unemployment rate rose to 4.2% from 4.1% in June, with forecasts ranging from zero to 176,000.
May's nonfarm payroll figures were revised from 144,000 to 19,000, while June's nonfarm payroll figures were revised from 147,000 to 14,000. The revised figures mean that the combined employment figures for May and June are 258,000 lower than before the revisions. Employment in health care and social assistance continues to rise. Federal government layoffs continue. The unemployment rate is 4.2%, with 7.2 million unemployed. Since May 2024, the unemployment rate has remained in a narrow range of 4.0% to 4.2%.
Institutional outlook
Guy Berger, a senior fellow at the Burning Glass Institute, a labor market think tank, believes the economy remains stable: "Almost all major indicators have been quite stable since last fall." The policy environment has become the biggest variable. Berger pointed out: "Given the tariffs, immigration restrictions, and the new tax bill, I don't think the stability can last."
Brian Jacobsen, chief economist at Annex Wealth Management, noted that the report cannot be sugarcoated, stating that the labor market is already in a state of "stalling." He believes the Federal Reserve may repeat last year's mistake and be forced to make up for its "wait-and-see" decision by cutting interest rates at its next meeting. He also suggested that if Fed Chairman Powell had known about the data in advance, he might have opposed the decision to pause rate cuts.
"We expect the Fed to start cutting rates in September," said Gregory Faranello, head of U.S. interest rate trading and strategy at AmeriVet Securities . He added: "It's a little surprising that the Fed chairman was suggesting a strong labor market just a few days ago, and then we get this jobs data."
The U.S. Bureau of Labor Statistics released its nonfarm payrolls report on Friday, showing nonfarm payrolls increased by 73,000 jobs in July. Economists polled by Reuters had forecast a gain of 110,000 jobs in July. The unemployment rate rose to 4.2% from 4.1% in June, with forecasts ranging from zero to 176,000.
May's nonfarm payroll figures were revised from 144,000 to 19,000, while June's nonfarm payroll figures were revised from 147,000 to 14,000. The revised figures mean that the combined employment figures for May and June are 258,000 lower than before the revisions. Employment in health care and social assistance continues to rise. Federal government layoffs continue. The unemployment rate is 4.2%, with 7.2 million unemployed. Since May 2024, the unemployment rate has remained in a narrow range of 4.0% to 4.2%.
Institutional outlook
Guy Berger, a senior fellow at the Burning Glass Institute, a labor market think tank, believes the economy remains stable: "Almost all major indicators have been quite stable since last fall." The policy environment has become the biggest variable. Berger pointed out: "Given the tariffs, immigration restrictions, and the new tax bill, I don't think the stability can last."
Brian Jacobsen, chief economist at Annex Wealth Management, noted that the report cannot be sugarcoated, stating that the labor market is already in a state of "stalling." He believes the Federal Reserve may repeat last year's mistake and be forced to make up for its "wait-and-see" decision by cutting interest rates at its next meeting. He also suggested that if Fed Chairman Powell had known about the data in advance, he might have opposed the decision to pause rate cuts.
"We expect the Fed to start cutting rates in September," said Gregory Faranello, head of U.S. interest rate trading and strategy at AmeriVet Securities . He added: "It's a little surprising that the Fed chairman was suggesting a strong labor market just a few days ago, and then we get this jobs data."
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