The July Jobs Report Shows the Economy 'Treading Water,' WSJ Chief Economics Commentator Says

Labor Market & Economic Indicators - July jobs report showed weaker than forecast job growth, with 73,000 jobs added and a slight unemployment rate uptick to 42% [1] - May and June hiring numbers were revised down significantly, indicating only 106,000 jobs added in the past 3 months [2] - Revisions to prior months' growth amounted to around 250,000 jobs, with roughly half attributed to public school teachers and the other half to private jobs [2] - Job growth in recent months is at its weakest since 2020 [3] Federal Reserve & Interest Rate Policy - Federal Reserve Chairman Jerome Powell announced interest rates would remain steady just 2 days before the weak jobs report [3] - The majority of the committee believed inflation was slightly above target and maximum employment was at target, lacking impetus to cut rates based on data through June [4] - The weak July data and downward revisions for May and June might have strengthened the case for lowering interest rates in September [5] Economic Uncertainty & Sector Performance - The broader economy is described as "treading water" due to factors like tariffs, cuts to federal government employment and spending, and crackdown on illegal immigration [6][7] - Job creation was primarily in sectors like education and social services, while construction and manufacturing showed declining employment [7][8] - The stock market recently hit a record high, suggesting investors are taking comfort that the worst of the trade uncertainty is behind us [8][9]