U.S. Job Growth Expected to Slow Sharply in July

U.S. job growth is forecast to slow considerably in July, with nonfarm payrolls expected to increase by just 100,000, according to a Dow Jones consensus estimate. This would mark the lowest monthly gain since October 2024, following a rise of 147,000 jobs in June and an average of 130,000 per month in the first half of the year. The unemployment rate is also projected to edge up to 4.2% when the Bureau of Labor Statistics releases its report on Friday.

Federal Reserve Chair Jerome Powell addressed the state of the labor market following the central bank's latest policy meeting, stating, > "You do see a slowing in job creation, but also in a slowing, slowing in the supply of workers. So you've got a labor market that's in balance." Powell added, > "The labor market looks solid."

Analysts are expected to scrutinize the details of the report, particularly the distribution of job gains across industries. John Velis, Americas macro strategist at BNY, noted, > "If you see cyclical industries continue to not generate jobs, and you see acyclical industries losing jobs, that's a sign that the labor market is really weakening."

Despite the consensus forecast, some firms anticipate a stronger result. TS Lombard cited high-frequency data suggesting that nonfarm payrolls could reach as high as 199,000 in July.