Contentious July jobs report confirms the U.S. economy is slowing sharply
The attention band hangs near the steps of the federal hall opposite the New York Stock Exchange in New York.
Michael Nagle | Bloomberg | Getty Images
Although controversial, the July Affairs report helped to confirm the idea that the US economic engine has been repelled.
Farm payrolls, even under silent expectations, increased only 73,000 for the month. The heavy revisions in the May and June issue reduced the average three -month average work gains to only 35,000 or less than one third of the same period a year ago.
Traditionally, a delayed indicator when it comes to recession, the weakness in business growth indicates an economy that can slow down even more than some of the traditional metrics.
“We are in a broad economic slowdown. The question I asked now, or not,” we are in a broad economic slowdown. ” He said. “The labor market is very important and difficult to measure what will happen.”
Wilmington’s chances of shifting to the stagnation of the United States is 50%. Tilley states that 68% of all economic activities in the first quarter, concerns about long -term hit than tariffs that can suppress consumer expenditures that continue to work and recruitment.
In fact, the pressure from tariffs, President Donald Trump’s taxes passing by many economists as much as expected inflation is one of the reasons for the fact that he said.
“If consumers should shoulder the load, they spend more for imports and entertainment expenditures, airlines, Disney trips, fun parks, hotels, all of them will be withdrawn.” He said. “We saw this in the data, and therefore there is no inflationary effect.”
Causes of optimism
To be sure, the growth picture is far from being terrible at this point.
However, in the first half, the GDP grew only 1.2% on average and consumer expenditures increased by almost 1%. The main reason for the big jump in the second quarter was a reversal of the increase in imports in the first quarter while companies were trying to avoid tariffs. In the first quarter, the growth fell by 0.5% in the middle of the swelling of the imports extracted from the GDP calculation.
If the July unemployment report shows the future, the picture must be gloomy.
“The most likely result is in the second half of 2025 and at the beginning of 2026 and the first half of this year, but there is still no stagnation, but there is still no stagnation.”
“However, considering the reviewed reading in the labor market, the risks of stagnation are rising and higher tariffs increase this risk.” “It is easy to see that business growth and higher tariffs reduce consumers’ expenditures and reduce the investments of businesses and pushing the economy to stagnation.”
Goldman Sachs estimates that growth will only be 1% in the last two quarters due to slower consumer expenditures and “a sharp slowdown in real income growth reflecting higher tariff -guided inflation and decreases in transfer payments [the fourth quarter] The last financial invoice was included. “
The company, “Friday’s payroll report, payroll growth, large data indicators and wider growth data set in line with the larger growth data set. Both have slowed significantly in recent months. When considered together, the economic data confirms our opinion that the US economy has grown at a potential speed.”
Despite the cloudy appearance, the White House officials insist that the economy is intact, and Trump will be better when a great bill of billing action begins.
Trump returned harshly against the July Affairs Report, and while calling for “fake” and “fraudulent” numbers A real social shipment.
However, White House economist Kevin Hassett said that on Monday, CNBC, even if it revealed a wider economic power, it was about revisions.
“There is a really good reason to be super optimistic about the second half of the year. However, the job number is definitely that if the revision turns out to be correct, it shows that there is less acceleration than we think.” He said.
I’m looking at the Fed
Trump management officials call on the FED to reduce comparison fund levels that feed on many other consumer interest rates. Fed last week The ratio kept the ratio and has made a public comment on many authorized publicly since the report.
However, symptoms of economic weakness can change it.
Housing data has recently been weak, reflecting a decreasing level of buyer with increasing prices and stubborn high mortgage rates.
He continued: “What do we do with an an average of 30 -year mortgage rate in an economy that grows 1% in an economy?” Experienced Economist and Strategist Jim Paulsen wrote A Hand Reason Post. There is nothing about “healthy or solid ‘about them [economic] The numbers are well below the 2% stop speed and shout for help. “
Other economists repeated this feeling.
“In my opinion, today’s job report appears to be a stagnation.”
Mark Zandi, the leading economist of Moody’s Analytics, “The economic stagnation cliff. This is the net package service of last week’s economic data dump”. Published on Sunday X.
Monday received worse news Factory Orders 4.8 %falls, in fact, a touch of Dow Jones than in January 2024, despite the worst reading. In addition, the Conference Board Employment Trends Index It fell in July, which has reached its lowest level since October 2024.
Markets were flexible
In the midst of worrying economic signs, stocks fell, although not dramatic. Wall Street On Monday, he hopes that the US and the European Union can reach a long -term tariff agreement.
Trade has recently been variable, Dow Jones Industrial Average last month is 1.7%.
“This confirmed most of our doubts. Obviously, we were waiting for the other shoes to fall, and now we’re starting to see a few shoes fall.” He said.
Mateyo has recently seen “too much comfort” because trade has greatly ignored the political storms in investors in Washington and has received its best brutal appearance to the economy.
“Many people predicted that good times would continue to roll and they will probably do.” “We do not think that a stagnation of the basic case will show itself. But given that uncertainty is really high, there will be a great slowdown.”
The markets were also evacuated in terms of seeing what Fed was doing.
Just before the job report, the merchants were throwing low rates at the Central Bank’s September meeting, then returned to pricing on Monday. CME GROUP. However, until then, there is more than one important data version, and this rhetoric is warm in extending so much.
Mateyo sees economic and politics uncertainty by adding a careful recipe.
“We warn customers to look at their general risk exposure and perhaps avoid the risky sectors of the market.” He said.
