America's hiring boom is officially over
The job market is tumbling. How did everyone miss the warning signs?
Pretty much everybody woke up last Friday feeling like America's labor market was in fine shape (to the extent the average person was thinking about it at all). Maybe things
weren't perfect, and
workers weren't living in the "
world is your oyster" situation they were in 2021 and 2022, but in general, things seemed pretty strong.
And then, at 8:30 a.m. ET, everything changed. The
jobs report said the US economy added 114,000 jobs in July, far fewer than the 176,000 jobs that economists expected. The unemployment rate jumped to 4.3% from 4.1% the previous month. For some context, back in April it was at 3.9% and had been under 4% for the longest stretch in decades. The weakness of the jobs report tipped the worry scale and
sent markets into meltdown mode. Many investors decided it was time to panic after all.
While a single data point isn't a good reason to change one's entire narrative, the report served as a wake-up call that danger is closer than a lot of people thought. The cracks in the economic foundation are increasingly
impossible to ignore. While it's not in disaster territory, the labor market has been weakening for a while, and it's not clear what's going to reverse that trend. The report's release just a few days after the Federal Reserve decided to hold interest rates steady rather than cut them in an attempt to restabilize the economy also fueled fears that the central bank is behind the curve and that a recession may be on the horizon.
