Surprise fall in US jobs last month as slow summer continues

Surprise fall in US jobs last month as slow summer continues

There was a surprise fall in US jobs last month as employment declined during the summer in local government education and retail, according to official figures.

Analysts had predicted an uptick in the number of jobs created in the world’s largest economy in July, but the number of roles fell by 23,000 over the month.

A fall in in local government education roles was the biggest driver behind July’s shock fall but retail trade also contributed, with declines in warehouse clubs, hypermarkets, gas stations and general mechanise sellers.

The Bureau of Labor Statistics also revised down the number of jobs added in May and June by 103,000, signalling a slow summer of job creation.

The latest figures raise questions over what the US central bank, the Federal Reserve, will decide to do with interest rates next month after keeping them on hold for all of this year.

Analysts had expected an uptick in the number of jobs being added to the economy last month of 80,000, as opposed to a loss of 23,000.

Payrolls do have a tendency to be softer in July, but chief investment officer of Premier Miton Neil Birrell said the US jobs market was weaker “by some distance”.

“Labour force participation is back at levels not seen since the days of Covid, meaning jobs just aren’t being created,” he said.

“This does leave the Fed with the problem of a weak jobs market providing a read across to growth, all at a time when inflation is a problem, but this data will ease the pressure to hike rates. It’s a big call in September.”

By BBC News