The July jobs report showed clear signs of cooling. Payrolls rose...
Sam Williamson@SWilliamsonEcon
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Aug 01, 2025
~1 min read
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The July jobs report showed clear signs of cooling. Payrolls rose just +73k vs. ~110k expected, while downward revisions to May and June (-258k) dragged the 3-month average to ~35k. Unemployment ticked up to 4.2%. Slower hiring and deep revisions point to a softening labor market, raising the odds of a September Fed rate cut and potential relief for mortgage rates. More details below.
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Private employers added 83k jobs in July, a substantial increase from the downwardly revised +3k in June and above the +69k added in May.
Good-producing sectors have shed 13k jobs in each of the last 3 months, led by manufacturing. Construction remains resilient, adding around 2-3k jobs per month.
Education and health services continue to drive gains on the services side, adding 79k jobs and comprising 95% of net jobs added by private employers last month. Professional and business services jobs continue to decline, losing 16k jobs on average the last 3 months. Retail recouped some of the jobs lost in May and June but remains negative over the last 3 months, and Financial Activities jobs grew by 15k.
The government shed 10k jobs in July, driven by -12k losses in Federal government and -3k in local government, which was partially offset by state governments adding 5k jobs.
Good-producing sectors have shed 13k jobs in each of the last 3 months, led by manufacturing. Construction remains resilient, adding around 2-3k jobs per month.
Education and health services continue to drive gains on the services side, adding 79k jobs and comprising 95% of net jobs added by private employers last month. Professional and business services jobs continue to decline, losing 16k jobs on average the last 3 months. Retail recouped some of the jobs lost in May and June but remains negative over the last 3 months, and Financial Activities jobs grew by 15k.
The government shed 10k jobs in July, driven by -12k losses in Federal government and -3k in local government, which was partially offset by state governments adding 5k jobs.
