Jobs report shows how much tariffs are hammering US economy
Hiring growth dropped dramatically last month and unemployment ticked up, the latest jobs report showed. Nonfarm payrolls added 73,000 in July, far lower than the 100,000 expected by analysts. The unemployment rate also ticked up to 4.2 percent. The report also sharply revised down the figures for May and June by a combined 258,000 jobs from the previously released figures.
Following the revision June’s total was left at just 14,000 and May’s at 19,000 — effectively flat. Analysts say July’s figure is also likely to be revised lower, possibly into negative territory. Stocks tumbled in pre-market trading with the S&P 500 down around one percent, and the Nasdaq down around 1.1 percent before the bell.
The latest figures suggest cracks are in fact starting to show up in the economy, despite a slew of previous better-than-expected economic data released recently. It comes after the Federal Reserve once again held rates steady at its July meeting on Wednesday. The weaker figures however could incentivize the Fed to lower interest rates at its next meeting in September.
Cutting rates is the Fed's main tool to stimulate growth, an agenda the President has been pushing for months. 'Too Little, Too Late. Jerome “Too Late” Powell is a disaster. DROP THE RATE!' the president wrote on Truth Social following the report's release. Reducing the benchmark rate would reduce borrowing costs for both businesses and everyday Americans — freeing up more cash to spend, invest, or hire.
'This is a gamechanger jobs report,' Heather Long, chief economist at Navy Federal Credit Union told CNBC. 'The labor market is deteriorating quickly.' Economists will look at the situation even more nervously after Trump unveiled a slew of new tariffs late last night.
'It’s the stark revisions to the prior two months that really stands out,' Bret Kenwell, eToro US Investment Analyst, said. 'Although investors seemingly embraced moving on from the trade-related tensions of March and April, businesses appear more hesitant to do so.
'Today’s report and the revisions reiterate the notion that the US labor market and economy are not firing on all cylinders,' he added.
