3 reasons to worry about July’s weak jobs report — and 1 reason not to panic

America’s robust post-pandemic job market is teetering on the brink after a lousy July hiring report in which the unemployment rate shot up to 4.3%, a three-year high.

America’s robust post-pandemic job market is teetering on the brink after a lousy July hiring report in which the unemployment rate shot up to 4.3%, a three-year high. The Federal Reserve now has egg on its face after it kept interest rates near a quarter-century high earlier this week. And for the everyday US consumer, economic pain could be coming down the pike as hiring slows — but lower interest rates for homes and credit cards could be on their way in just a few months. The government’s latest jobs report on Friday fell way short of expectations: Employers added just 114,000 jobs in July, compared to the 175,000 gain economists estimated in a FactSet poll.  Paychecks are also in a slump: Wage growth, as measured by average hourly earnings, continued to decelerate in July, logging its weakest annual rate since May 2021. By now, there’s ample evidence that the job market, a key driver of the US economy, has lost steam. A separate report earlier this week showed that job openings fell in June to the second-lowest level since March 2021. New applications for unemployment benefits, a proxy for layoffs, rose last week to the highest point in a year. Today’s US labor market looks way different from just two years ago when monthly payroll growth was on a tear and employers had a record 12.2 million job vacancies as the broader economy continued with its stunning ascent from pandemic depths. So, should you be worried? Sure. But don’t panic. The US economy remains fairly strong, and there’s reason to be hopeful about America’s ability to avoid a recession.