The pace of hiring in the U.S. slowed significantly in July, and the previously reported employment numbers for May and June were revised downward by 258,000 jobs in the latest report released Friday by the U.S. Bureau of Labor Statistics.
Meanwhile, the U.S. unemployment rate for July increased 0.1 percentage point to 4.2%.
Total nonfarm payroll hiring was weak in July (+73,000) and has shown little change since April. Over the month of July, employment gains primarily occurred in healthcare (+55,400) and social assistance (+17,900).
Industries with the job losses in July included professional and business services (-14,000) and manufacturing (-11,000). The federal government also continued to shed jobs (-12,000) in July. The federal government has lost 84,000 jobs since January.
Noteworthy in the July report were the significant revisions made to the preliminary data previously released by BLS for May and June. Job gains in May were revised down by 125,000 (from 144,000 to 19,000). The June data was also revised downward by 133,000 jobs (from 147,000 to 14,000). With these changes, the combined job gains for May and June went from the previously reported 291,000 to only 33,000.
President Donald Trump reacted to the soft jobs report by announcing in a social media post on Friday afternoon that he had directed his team to fire the commissioner of the Bureau of Labor Statistics.
Average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.3% to $36.44 in July. Over the past 12 months, average hourly earnings have increased 3.9%.
The stock market was down sharply Friday morning as investors weighed the weak jobs report and the impact of the president's Thursday announcement about tariffs that will increase the cost of goods imported by U.S. businesses. Yields on Treasury notes also tumbled.
The weak jobs report is seen as likely to increase chances that the Federal Reserve will vote to lower interest rates at its next meeting in September.
The CME Fedwatch tool, which measures market expectations for Fed rate changes, had put the probability of a September interest rate cut at 37.7% on Thursday, but the prediction changed to 80.5% late Friday morning after the jobs report was released.
