Key facts
- The U.S. economy lost 100,000 nonfarm jobs in July.
- The U.S. economy lost 23,000 nonfarm jobs in July.
- U.S. nonfarm payrolls were revised sharply lower for prior months.
- The U.S. unemployment rate rose to 4.3% in July.
- The U.S. unemployment rate fell to 4.1% in July.
- The U.S. labor force participation rate fell to a near 5-1/2-year low.
- Canada added 75,100 jobs in July.
- Canada's unemployment rate fell to 6.4% in July.
- Canada's unemployment rate is at a two-year low.
- The labor share of U.S. nominal GDP fell to a record low of 52.9% in Q2.
- The labor share of U.S. nominal GDP was 53.7% in Q1.
The U.S. economy faced an unexpected setback in July, with reports indicating a decline in nonfarm payrolls. One source states that 100,000 jobs were lost, while another reports a decrease of 23,000 jobs. These figures represent a significant miss from forecasts that anticipated job gains of 80,000. Compounding these concerns, prior months' data were revised downward. The unemployment rate presented conflicting figures, with one report indicating an increase to 4.3% and another suggesting a fall to 4.1%. The latter figure was influenced by a decrease in the labor force participation rate, which dropped to its lowest point in approximately 5-1/2 years as more individuals left the workforce.
These labor market trends in the U.S. could impact Federal Reserve policy, with expectations for a September rate hike potentially diminishing. In contrast, Canada's economy demonstrated considerable strength in July. Employment surged by 75,100 positions, significantly exceeding expectations. This robust job growth led to a decrease in Canada's unemployment rate to 6.4%, marking its lowest level in two years and signaling economic resilience.
Further underscoring challenges within the U.S. economy, the labor share of nominal gross domestic product (GDP) declined to a record low of 52.9% in the second quarter. This represents a decrease from 53.7% in the first quarter. Data from the Bureau of Labor Statistics indicates this trend is linked to productivity gains outpacing wage growth, suggesting that workers are capturing a smaller portion of the economic output.