The Labor Department reported Friday that the nation’s employment market, thought for months to be slowing but steady, is much worse.
The Labor Department reported the nation added 73,000 jobs in July, below the 100,000 level expected. Adding 100,000 jobs each month is regarded by economists as the line between a growing economy and a shrinking economy.
In addition, the unemployment rate rose to 4.2% from 4.0% a month earlier.
Revisions to reports from the last two months were starker. Initially, the Labor Department reported May growth of 144,000 jobs. A new revision shrunk the total to 19,000 jobs. The initial June report showed 147,000 new jobs were created. Friday’s revision cut the total to 14,000.
In the past three months, the U.S. averaged 35,333 new jobs a month, far below a healthy economic level, according to economists. The total may be much worse when revisions next month are released. The past two revisions shrunk totals an average of 129,000 jobs. A similarly sized revision could take July’s job total to a 50,000 jobs loss.
Heather Long, chief economist at Navy Federal Credit Union, said the report is a game-changer.
Long said, “The labor market is deteriorating quickly.”
Wilmington Trust Chief Economist Luke Tilley said the report and revisions were the data points economists had forecasted for months.
“Firms are facing a very different cost structure,” Tilley said. “They need to adapt to a new cost structure, which means holding off on hiring.”
Two days before the job report, the Federal Reserve’s Federal Open Market Committee voted to keep interest rates steady, despite calls from the White House and others to cut rates.
Federal Reserve Chairman Jerome Powell said, “Despite elevated uncertainty, the economy is in a solid position. The unemployment rate remains low, and the labor market is at or near maximum employment.”
The new report led traders to change their minds about the health of the job market and economy. Shortly after the report was released, futures traders raised the odds for the Federal Reserve to cut interest rates at its next meeting in September to 75%. Minutes before the report, traders rated the odds of a cut at 40%.
Stock markets began the day much lower. The Dow Jones index fell over 700 points and the Nasdaq was down nearly 2%.
In addition, President Donald Trump released an executive order Thursday setting new reciprocal tariff rates for numerous countries. Countries not listed will be subject to a 10% tariff rate. The rates take effect Thursday.
The executive order also confirmed new tariff rates agreed upon with trading partners, including Canada, the European Union, Japan, South Korea, the Philippines and Indonesia.
In addition, goods determined to be transshipped from their originating country to avoid or claim a lower tariff rate will be subject to an additional 40% tariff on top of the originating country’s standard tariff.
Specific sector-based tariffs on products such as aluminum and steel will add to each country’s base tariff rate.
Countries listed with designated tariff rates are:
Afghanistan 15%
Algeria 30%
Angola 15%
Bangladesh 20%
Bolivia 15%
Bosnia and Herzegovina 30%
Botswana 15%
Brazil 10%
Brunei 25%
Cambodia 19%
Cameroon 15%
Chad 15%
Costa Rica 15%
Côte d`Ivoire 15%
Democratic Republic of the Congo 15%
Ecuador 15%
Equatorial Guinea 15%
European Union: Goods with Column 1 Duty Rate Greater Than 15% 0%
European Union: Goods with Column 1 Duty Rate Less Than 15% 15% minus Column 1 Duty Rate
Falkland Islands 10%
Fiji 15%
Ghana 15%
Guyana 15%
Iceland 15%
India 25%
Indonesia 19%
Iraq 35%
Israel 15%
Japan 15%
Jordan 15%
Kazakhstan 25%
Laos 40%
Lesotho 15%
Libya 30%
Liechtenstein 15%
Madagascar 15%
Malawi 15%
Malaysia 19%
Mauritius 15%
Moldova 25%
Mozambique 15%
Myanmar (Burma) 40%
Namibia 15%
Nauru 15%
New Zealand 15%
Nicaragua 18%
Nigeria 15%
North Macedonia 15%
Norway 15%
Pakistan 19%
Papua New Guinea 15%
Philippines 19%
Serbia 35%
South Africa 30%
South Korea 15%
Sri Lanka 20%
Switzerland 39%
Syria 41%
Taiwan 20%
Thailand 19%
Trinidad and Tobago 15%
Tunisia 25%
Turkey 15%
Uganda 15%
United Kingdom 10%
Vanuatu 15%
Venezuela 15%
Vietnam 20%
Zambia 15%
Zimbabwe 15%
