U.S. Lost 23,000 Jobs in July, Fed Hike Odds Drop
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- U.S. labor market shed 23,000 jobs in July against expectations for an 80,000 gain, with June revised down to 20,000 from 57,000 and May cut to 63,000 from 129,000
- Unemployment rate dipped to 4.1% in July, beating the 4.2% forecast, while average hourly earnings rose just 0.1% month-over-month (vs. 0.3% expected) and 3.2% year-over-year
- September Fed rate hike odds fell from 55% to 46% on CME FedWatch after the print, as markets positioned for a potential hold at the next policy meeting
- Markets moved in classic soft-data fashion: U.S. stock index futures gained, bond yields dipped, gold rose 3%, and silver jumped nearly 6%, while bitcoin held near $65,000 with crypto showing little reaction
- RSM chief economist Joe Brusuelas pushed back on the dovish read, blaming a World Cup timing seasonal-adjustment quirk and saying the Fed should and likely will 'mostly ignore' the report
- The last negative nonfarm payrolls print was February's 156,000-job loss, making July's shortfall the second consecutive month of labor market cooling
Why it matters: Two straight months of negative surprises give Fed doves fresh ammunition to argue for holding rates, dropping September hike probability below the 50% line — but the downgraded wage growth (3.2% YoY vs. 3.5% expected) and Brusuelas's World Cup-seasonality caveat mean traders shouldn't fully price in a dovish pivot ahead of next week's July CPI print.
