US Employers Cut Jobs, Unemployment Rate Falls

Summary

The July US jobs report showed nonfarm payrolls fell by 23,000 with significant downward revisions, while the unemployment rate dipped to 4.1% due to falling labor participation and wages softened. Economists Claudia Sahm and Constance Hunter react, noting seasonal noise in education/government payrolls but also underlying labor-market softening. Hunter argues the data support a Fed hold and expects markets to price out a September rate cut, while Sahm highlights disinflation support from soft wages. Markets rallied as rate hike fears receded, though structural challenges like aging populations and fiscal pressures in Japan also surfaced.

• July US nonfarm payrolls fell by 23,000, with May–June revisions down 103,000.
• Unemployment rate dropped to 4.1% as labor force participation declined.
• Average hourly earnings rose just 0.1% month-over-month, signaling softer wage growth.
• Government/education payrolls likely distorted by seasonal-school-calendar noise.
• Constance Hunter believes the data bolster the case for a Fed hold and expects markets to price out a September rate cut.
• Claudia Sahm notes soft wages help keep inflation in check, supporting disinflation.
• Japan’s aging population, high debt/GDP, and recent yen intervention discussed as global structural risks.
• Equities and bonds rallied on the report as rate-hike fears eased and yields fell.