US job market cools as pressure grows on Jerome Powell to cut rates

New York Post

2 days ago

The US job market cooled down in July as government and foreign workers suffered a significant hit — will likely putting renewed pressure on the Federal Reserve to cut rates in September.
Nonfarm payrolls swelled by a lower-than-expected 73,000 jobs last month, the Labor Department reported Friday, falling short of the 100,000 jobs forecast by economists polled by the Wall Street Journal.
Private sector employment increased by 85,000, while government jobs declined by 12,000, according to the data.
3 US employers added just 73,000 jobs in July, according to the Bureau of Labor Statistics.
AP
Trump's Department of Government Efficiency has chopped 84,000 jobs since January.
Meanwhile, the unemployment rate in July ticked up slightly to 4.2%, according to a separate report by the Labor Department's Bureau of Labor Statistics.
The employment level of foreign-born workers – which does not distinguish between illegal and legal immigrants – has dropped by about 1 million since President Trump returned to the White House in January, according to the Federal Reserve Bank of St. Louis.
The number of US-born workers jumped by about 2.5 million over the same period, according to the data.
Hiring in July continued to increase in health care and social assistance, adding 55,000 and 18,000 jobs respectively, according to BLS.
Average hourly earnings for nonfarm payroll employees rose by 12 cents, or 0.3%, to $36.44 in July.
Earnings have increased 3.9% over the past 12 months, continuing to outpace inflation, which currently runs at 2.4%.
'Inflation has cooled, wages have increased, unemployment is stable, and the private sector is growing,' White House spokesperson Karoline Leavitt told The Post.
'President Trump's America First agenda has ensured new jobs go to American citizens, instead of illegals or foreign-born workers.'
3 Employment in May and June added 258,000 fewer jobs than previously reported.
AP
The latest job figures come on the heels of data released earlier this week that showed the US economy grew at a faster pace than expected.
'Following expectation-defying 3% GDP growth in the second quarter, today's jobs report provides further evidence that the American people are seeing real progress as we recover from the failed economic policies of the previous administration,' US Labor Secretary Lori Chavez-DeRemer said Friday.
But the July jobs report drastically revised down the gains made in the two previous months.
Payrolls for June were slashed to 14,000 from the 147,000 originally reported, the fewest in nearly five years, while the May total was cut by 125,000 to a gain of 19,000 jobs.
The BLS described the revisions to May and June payrolls data as 'larger than normal.'
In July, the number of long-term unemployed people – those jobless for 27 weeks or more – jumped by 179,000 to 1.8 million.
'While the labor market is not in crisis, hiring momentum continues to soften, and pressures are beginning to build,' Ger Doyle, North America president at Manpower Group, said in a note Friday.
3 The labor force participation rate changed little at 62.2%.
Christopher Sadowski
'Employers continue to remain cautious, but with positive signals from consumer confidence and GDP growth, we may be nearing a turning point.'
The labor market is weakening at a time when tariffs are starting to boost inflation, leading Wall Street experts to increase the likelihood for the Fed to cut rates after policymakers kept them unchanged Wednesday.
'The door to a Fed rate cut in September just got opened a crack wider,' said Christopher Rupkey, chief economist at FWDBONDS. 'The labor market is not rolling over, but it is badly wounded and may yet bring about a reversal in the US economy's fortunes.
Trump on Friday called on the Federal Reserve Board to 'assume control' if Fed Chair Jerome Powell does not slash rates soon.
'Jerome 'Too Late' Powell, a stubborn MORON, must substantially lower interest rates, NOW. IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!' Trump wrote in a post on Truth Social Friday morning.
Fed Governors Christopher Waller and Michelle Bowman had voted against Powell's 'wait and see' approach — marking the first time in three decades when more than one governor on the 12-member board has dissented on an interest-rate vote.
Both officials on Friday warned of risks to the economy as they called for an immediate quarter-percentage-point reduction, arguing that Trump's tariffs will likely only have a brief impact on inflation.
'I see the risk that a delay in taking action could result in a deterioration in the labor market and a further slowing in economic growth,' said Bowman, who serves as the Fed's vice chair for bank supervision.