The July jobs report showed that hiring was sluggish as the unemployment rate ticked higher. But the bigger news is that hiring came to a near standstill after Trump tariffs spiked on April 2. S&P 500 futures, already under pressure from the latest tariff news and Amazon earnings, fell further after the jobs report before paring losses.
Odds of a Federal Reserve rate cut at the Sept. 17 meeting jumped, but markets don't yet see a rate cut as a slam dunk.
This story is being updated with more data and analysis.
9:51 a.m. ET
Wage Growth Surprisingly Strong
Average hourly earnings growth rose 0.3% on the month and 3.9% from a year ago, with the latter number topping forecasts of 3.7%.
The average workweek also increased to 34.3 hours from 34.2 hours. The combination of a longer workweek and higher pay mean that income gains have fared OK.
Economywide pay rose 5.3% from a year ago, factoring in the number of works, length of workweek and hourly earnings. That matches the highest level since March 2024.
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9:44 a.m. ET
Job Market Rests On 'One Leg'
"Entering 2025, the jobs market was largely held up by a three-legged stool of healthcare and social assistance, leisure & hospitality, and government hiring," wrote Laura Ullrich, director of North America economic research for Indeed.
"Now, only healthcare and social assistance remain standing and steadily adding jobs — but it's difficult to hold the rest of the market up with one leg."
9:35 a.m. ET
S&P 500 Sharply Lower
The S&P 500 fell 1.2% in Friday morning stock market action, as markets took a glass-half-empty view of weak job growth, despite better odds of a Fed rate cut on Sept. 17. The S&P 500's three-session losing streak is on track to reach four.
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9:28 a.m. ET
More Jobs Report Details
Manufacturers shed 11,000 jobs, including 2,400 in the tariff-hit auto sector. Administrative support agencies lost 19,800 jobs, including 4,400 temp jobs. Wholesale trade firms cut 7,800 jobs.
Meanwhile, health care and social assistance firms added 73,300 jobs. Retail employment rose 15,700, after falling by more than 14,000 in each of the prior two months. The leisure and hospitality sector added just 5,000 jobs after a 4,000 increase in June.
The federal government cut 12,000 jobs last month, while state and local government employment edged up by 2,000.
Over the past three months, the private sector has added an average of 52,000 nonfarm jobs per month, while the headline payroll gain has averaged just 35,000 a month amid government job cuts.
9:03 a.m. ET
Fed Rate-Cut Odds Jump
Markets are pricing in 67% odds of a Sept. 17 Fed rate cut, up from 38% on Thursday, according to CME Group's FedWatch tool. Markets now see 69% odds of 50 basis points in rate cuts this year, up from 40% a day ago.
Odds of a rate cut had tumbled amid a perceived hawkish tone from Fed Chairman Jerome Powell during Wednesday's news conference and a slight overshoot of the Fed's primary inflation rate for June.
8:58 a.m. ET
Household Survey Weak Too
Headline payrolls come from an employer survey, while the unemployment rate is derived from the separate household survey, which comes with a higher margin of error.
The household survey showed that labor market weakness extended into July, whereas the employer survey showed better, though lackluster, hiring in July.
The household survey showed the ranks of the employed falling by 260,000 in July. The labor force, those working or looking for work, shrank by 38,000. The winnowing of the labor force has helped to hold down the unemployment rate.
8:47 a.m. ET
Is The Trump Tariffs Slowdown Ending?
The revised data seem consistent with a big initial hit to hiring from Trump tariffs. April's jobs data, based on a mid-month survey, came too soon to be impacted by the April 2 "Liberation Day" tariff shock. That would have shown up in May. For much of May, the U.S. was in a full-scale trade war with China. However, barring another downward revision next month, the labor market may be finding its footing.
8:45 a.m. ET
Futures Slightly Pare Losses
With Treasury yields tumbling and a September rate cut firmly back on the table, S&P 500 futures slightly pared their loss to 0.8%, after initially widening their decline on the jobs report.
8:41 a.m. ET
Private Hiring, Government Firing
The private sector added 83,000 jobs in July after a revised gain of just 3,000 jobs in June.
Government cut payrolls by 10,000 in July. June's initially reported gain of 73,000 was revised down to 11.000.
8:38 a.m. ET
Huge Downward Revisions
May's payroll gain was revised down to just 19,000 from 144,000. June's gain was slashed to 14,000 from 147,000. Combined, prior job gains were 258,000 lower than previously reported.
8:36 a.m. ET
Treasury Yields Skid
The 10-year Treasury yield fell 6 basis points to 4.3%. The two-year yield, closely tied to Fed rate policy, tumbled 14 basis points to 3.81%.
8:31 a.m. ET
Jobs Report Data
Employers added 73,000 jobs in July, below forecasts of a 110,000 gain. The unemployment rate rose to 4.2%.
Tax Receipts Show Solid Growth
Income and payroll taxes withheld from employee paychecks climbed 6.4% from a year ago in the five weeks through July 25, the second straight month of solid gains. That's way above the 4.5% annual pace of aggregate private-sector pay growth in June, a figure that includes both additional work (employees and hours) and wage growth.
Unlike most labor market data that is subject to revision or based on surveys, the tax data is real-world data that covers the vast majority of workers. Still, the tax receipts can be a bit lumpy and skewed by a number of factors, including tax code progressivity, as well as bonuses, commissions and the cashing in of stock options.
