“Gamechanger Jobs Report”

This is a gamechanger jobs report. The labor market is deteriorating quickly.

Navy Federal Credit Union chief economist, Heather Long, on the latest jobs report released Friday that showed fewer-than-expected jobs created. Reflecting the rapidly-changing landscape and diversity of economic data, only days earlier Long had commented on another report: “The word of the summer for the economy is ‘resilient.’ The consumer is hanging in there, but still on edge until the trade deals are done.”

Why It Matters: The monthly jobs report shows a snapshot of the labor market. The latest data showed 73,000 jobs created in July — fewer than expected. The report also included “significant downward revision” to previous monthly numbers; revisions happen regularly as more data becomes available. Overall, the picture that emerges from this data shows a significant slowdown in labor market growth.

Why Is This Happening? “This is the slowdown that we’ve been expecting. Firms are facing a very different cost structure. They need to adapt to a new cost structure, which means holding off on hiring.” Luke Tilley, chief economist at Wilmington Trust, provides one theory on the slower job growth. While areas like the retail industry and healthcare did show job growth, the federal government — where the Trump administration has sought to cut jobs as part of the Department of Government Efficiency (DOGE) —showed fewer jobs created.

Important Context: “In many ways, this is about slowing down. And now the test we have is really to figure out, to what extent is this slowdown likely to persist and get us into a more troublesome position. But we don’t know that now, and that’s something that I’ll be working on over the next two months,” according to Atlanta Fed President Raphael Bostic on a CNBC interview. Other economic data showed a different picture of the economy, with the early GDP reading showing the economy growing at a rate of 3% — better than expected.

After the jobs report was released, President Trump fired the person at the head of the Bureau of Labor Statistics, claiming politics influenced the report: “In my opinion, today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad.” The White House says some of the volatility in the data from the last few weeks comes from uncertainty over tariffs, and says that with new deals in place, the uncertainty should lessen.

Learn More: The Wild Week in the American Economy (WSJ Gift Link)

Consumer spending heated up a bit last month – but so did inflation (CNN)