US July Jobs Growth Slows Signaling Labor Market Deceleration

Recent U.S. labor market data reveal a notable slowdown in job growth, with July employment gains falling short of expectations and downward revisions to prior months exacerbating concerns. The economy added only 73,000 jobs in July, missing the consensus forecast of 110,000, and revisions show that May and June job gains were significantly lower than initially reported, marking the weakest three-month period for job creation since the post-Great Recession era, excluding the COVID-19 anomaly. Analysts and officials, including Federal Reserve Chair Jerome Powell, describe the labor market as balanced but vulnerable, with both labor demand and supply declining partly due to ongoing tariff uncertainties and restrictive immigration policies reducing labor force growth. Key sectors like healthcare and social assistance remain the primary sources of job additions, while manufacturing, mining, trade, and professional services have contracted. Despite easing labor market conditions, wage growth and labor costs have risen slightly more than expected, with the Employment Cost Index increasing 0.9% in the second quarter and wages growing 3.6% annually, reflecting persistent inflationary pressures. Overall, these trends underscore the challenges facing the U.S. economy amid trade tensions and policy impacts on employment dynamics.