CounterPunch Exclusives

CounterPunch Exclusives

July Job Report: Weak Job Growth and Slowing Wages

The economy lost jobs for the first time since a weather-related drop in February. The unemployment rate edged down to 4.1 percent, but the decline was the result of people dropping out of the labor market in July. Employment as measured in the household survey fell by 87,000. Wage growth also slowed further to a year-over-year increase of 3.2 percent. That is down from a pace of more than 4.0 percent through 2023 and 2024.

The weakness in employment on the household side is driven by prime-age (ages 25 to 54) workers. Their employment-to-population ratio (EPOP) fell 0.6 percentage points (p.p.) in June to 80.2 percent. It recovered only 0.2 p.p. of this fall in July, leaving the rate 0.4 p.p. below the May level. All of this drop was due to a fall among prime-age men. Their EPOP fell 0.9 p.p. in June and only rose 0.1 p.p. in July leaving it at 85.8 percent, 0.8 p.p. below the May level. Women’s EPOP, at 75.2 percent, is the same as the May level.

July Fall, Coupled with Downward Revisions to May and June Data, Leave 3-Month Average at 20K

Job growth seems to again be on a very slow track. The July decline was driven by a 49,600 drop in local government education, which is most likely a seasonal adjustment issue. But even pulling out government, private sector employment growth averaged just 40,000 over the last three months.

That may be close to the breakeven pace given near zero immigration and the retirement of baby boomers, but the further slowing of wage growth indicates serious labor market weakness. With inflation at 3.5 percent over the last year, wages are not even keeping pace.

Health Care and Social Assistance Continue to Lead Job Growth

The health care and social........

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