'Down The Middle Of The Fairway': Economists React To The July Jobs Report On Twitter

Nonfarm payroll employment rose by 187,000 jobs in July, a bit lower than consensus estimates, the U.S. Bureau of Labor Statistics reported Friday.

The unemployment rate fell to 3.5%, the same rate from one year ago. The unemployment rate has remained at or below 3.7% since the end of the first quarter of 2022.

Construction employment added 19,000 jobs in July, continuing its upward trend. The industry has averaged 17,000 monthly jobs gains over the past 12 months.

Another commercial real estate-related industry, the leisure and hospitality sector, added 17,000 jobs in July. The industry is now below its pre-pandemic, February 2020 job count by 352,000 jobs.

Employment in retail trade showed little change over the month, according to the Bureau of Labor Statistics. 

Here's how economists and others reacted to the June jobs report on X, the platform formerly known as Twitter:

Today’s July jobs report shows a job market that's still on a glide path to a soft landing:

-Jobs growth at 187k, just below expectations
-Unemp ticked down to 3.5%
-Wage growth was unchanged at 4.4%

1/

— Daniel Zhao (@DanielBZhao) August 4, 2023

July saw 187,000 job gains in a wide variety of industries, especially services.

Healthcare +63,000
Social assist +24,000
Construction +19,000
Finance +19,000
Wholesale trade +18,000
Hospitality +17,000
Retail +9,000

Temp help -22,000
Warehouse -6,000
Manufacturing -2,000

— Heather Long (@byHeatherLong) August 4, 2023

The jobs report for July was down the middle of the fairway. Couldn’t have been much better. Job growth is strong, but moderating, consistent with the Federal Reserve’s efforts to quell inflation. Wage growth is still a bit hot for the Fed’s liking, but it continues to cool off.

— Mark Zandi (@Markzandi) August 4, 2023

If you were to write the script of what a soft landing looks like, this is it.

Payrolls grew a strong +187k, signaling a slower yet still strong—and more sustainable—pace. Downward revisions of -49k for the prior two months mean job growth has averaged +217k over the past 3 mths

— Justin Wolfers (@JustinWolfers) August 4, 2023

For now, once elusive soft landing looks within reach, albeit with a fair bit of turbulence. Bankruptcies and lay-off announcement are up. What was a marathon has become a relay race or a series of rolling recession as the Fed hits its hardest mile, getting down to 2% inflation…

— Diane Swonk (@DianeSwonk) August 4, 2023

Someone asked me just yesterday if we were in a recession. We added 187k jobs in July and the unemployment rate was 3.5%.
There continues to be a disconnect between reality and perceptions.

— Betsey Stevenson (@BetseyStevenson) August 4, 2023

I'm considering getting t-shirts that say, "In this current market, monthly job gains above 100,000 are strong."

— Nick Bunker (@nick_bunker) August 4, 2023

Notably, the strength in construction is being driven by nonresidential -- consistent with the rise in manufacturing construction we saw in last week's data. (Also notable that residential construction employment has leveled off or even rebounded in the past couple months.) pic.twitter.com/yOpeT6qeHt

— Ben Casselman (@bencasselman) August 4, 2023

**Women now make up half of U.S. workers (49.9%)**

That's only happened twice before in US history:
December 2019 just before pandemic
2009 after many men lost jobs in Great Recession

Forget the "She-session." This is a Working women boom. pic.twitter.com/8y9Twxa3FC

— Heather Long (@byHeatherLong) August 4, 2023

It looks like we are still seeing the most rapid wage growth at the bottom end of the wage ladder. Wages for production workers in restaurants rose at a 7.3 percent annual rate over the last three months, 6.2 percent over the last six months

— Dean Baker (@DeanBaker13) August 4, 2023

If the low income sectors are shedding hours worked, we may be have peaked as to labor demand.
Unsurprisingly, average weekly incomes fell in all those very large sectors as well. Less income, less spending. Especially by those who spend the highest % of their income. Fed smiles.

— Dan Alpert (@DanielAlpert) August 4, 2023

Overall this report is mixed for the inflation outlook:

Jobs/hours: Cooling
Unemployment rate: Neutral
Wages: Heating

I tend to think the order I listed them above is roughly right for what signals matter so think this report is slightly favorable for inflation.

— Jason Furman (@jasonfurman) August 4, 2023

This cannot be said enough: the soft landing isn’t guaranteed, and the key threat to it is over-hiking by the Fed. It’s time for the Fed to pause. 2/

— Heidi Shierholz (@hshierholz) August 4, 2023

In sum,

- strong labor market, high employment rates & substantial wage growth

- unfattening of pandemic profit margins means wage growth can sustainably exceed price growth for a bit, more labor & consumer power delivering disinflation & real wage gains

- bets on soft landing

— Aaron Sojourner (@aaronsojourner) August 4, 2023