WASHINGTON–The economy added approximately 73,000 jobs in July, which is below what many economists had been forecasting, but the report could raise the likelihood of a Federal Reserve rate cut in September, one CU economist is predicting.
The new data from the Labor Department also show the unemployment rate slightly rose to 4.2%, up from 4.1%the month in June.
“The latest jobs report was poor, showing modest job gains in July and massive downward revisions to prior months,” said Curt Long, chief economist with America’s Credit Unions. “The revised estimate for June now shows a gain of only 14,000 jobs during that month, a reduction of 258,000 from the initial estimate. This report reframes several debates including the overall momentum in the economy, the impact of tariffs, and the prospect for rate cuts.
“Market expectations for a September rate cut jumped on the release of the report, and a cut by the October FOMC meeting is fully priced in,” Long continued. “Credit unions are second to none when it comes to helping their members through financial distress, and they are well positioned to do so should we encounter a period of rising unemployment.”
During 2024 the economy added approximately 168,000 jobs per month, indicating a hiring cooling is occurring, numerous analysts are saying.
“Economists expect President Trump’s policies to more substantially hit the labor market in the coming months. Higher tariffs on dozens of countries are set to go into effect on Aug. 7,” noted the New York Times.
‘Hard to Pull Trigger’
“It’s hard to pull the trigger on hiring when you’re uncertain about where tariffs are going to land,” said Diane Swonk, the chief economist at KPMG, told the Times. “It’s the uncertainty that causes the paralysis.”
As the CU Daily reported earlier, the Federal Reserve’s Open Market Committee adjourned earlier this week by opting not to lower rates, as President Trump has been demanding. Its next meeting is in September.
