Employers Unexpectedly Cut 23,000 Jobs In July — Markets See September Fed Hike as Less Likely
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The U.S. labor market unexpectedly weakened in July as a surge in government layoffs pushed overall job growth into negative territory.
Nonfarm payrolls contracted by 23,000 in July, against a consensus estimate of 83,000 and down from June’s downwardly revised 20,000, data published Friday by the Bureau of Labor Statistics showed.
The unemployment rate came in at 4.1%, versus the 4.2% economists expected.
Average hourly earnings rose 0.1% on the month, missing the 0.3% expected, and 3.2% from a year earlier, below the 3.5% predicted.
May nonfarm payrolls were revised down by 66,000 to 63,000. Similarly, the June reading was revised down by 37,000, to 20,000.
Why This Matters for the Fed
Fed futures repriced the probability of a September 16 rate hike lower to 45% Friday morning, according to CME FedWatch.
On July 29 the Federal Open Market Committee held the federal funds rate at 3.50% to 3.75% for a fifth straight meeting.
Three regional presidents dissented, preferring a quarter-point increase: Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas.
This is a developing story…
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