People walk through the Manhattan Mall on July 5, 2024 in New York City.
Spencer Pratt | Getty Images News | Getty Images
U.S. hiring slowed sharply last month, with job losses in the information and financial industries.
The information services industry was a clear weakness in July, with 20,000 job losses. Salaries in professional and business services and financial activities fell by 1,000 and 4,000 respectively.
“These industries are known for creating higher-wage, higher-quality jobs,” said Julia Pollak, chief economist at ZipRecruiter. “The labor market is clearly no longer normalizing. Further deterioration could trigger job losses, lower consumer spending, lower corporate income. A negative cycle of decline and more layoffs.”
Nonfarm payrolls rose by just 114,000 this month, well below Dow Jones’ forecast of 185,000. The unemployment rate climbed to 4.3%, the highest level since October 2021.
To be sure, there are some relative highlights.
Health care once again led job creation, with 55,000 new jobs added. Other industries with larger gains included construction (25,000), government (17,000) and transportation and warehousing (14,000). The leisure and hospitality industry has been another major growth area over the past few years, adding 23,000 people.
“The latest developments in the labor market are consistent with an economic slowdown, but not necessarily a recession,” said Jeffrey Roach, chief economist at LPL Financial. “However, there are early warning signs of further labor market weakness.”
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