Employment Research Brief

Labor softness complicates Fed outlook. July’s job report showed the labor market remains in a precarious position, as employers shed 23,000 jobs, while May and June job gains were revised down by a combined 103,000. Leisure and hospitality and government posted the largest declines, losing 40,000 and 53,000 jobs last month, respectively. Some of this weakness may reflect education seasonality and the end of temporary FIFA World Cup hiring. Still, retail trade shed roughly 20,000 jobs, financial activities lost 14,000 positions, and health care added a modest 23,000 roles. These trends indicate employers across sectors are reluctant to add staff, keeping labor conditions in focus for the Federal Reserve.