While many American families are gearing up for the start another school year, July’s Job Report and June’s Job Opening Survey were released this morning. Unlike the steady statistics we have been seeing in recent months, the July report shows a sharp reduction in new jobs. Some experts say that this proves the economy has cooled down too much, and that they see a recession on the horizon. With inflation and an election, and now school, at the top of everyone’s mind, the new report has sent the stock market on a downward trajectory. While economists were expecting more, there were fewer new jobs than expected, and unemployment rose again for the fourth month in a row. The Federal Reserve did hold interest rates steady, but anxiety is once again rising that this will do nothing to stop a possible recession in the U.S.
According to the U.S. Bureau of Labor Statistics, in July, the U.S. economy added 114,000 new Nonfarm payroll jobs. June’s numbers were revised down to 179,000 from 206,000, and May’s numbers also went down 2,000 jobs, dipping from 218,000 to 216,000. As stated above, the stock market has met the news with some heavy downward trending in trading. July’s job opening report, along with June’s and May’s downwardly revised numbers, saw unemployment increase slightly to 4.3% for the last month, making the fourth month in a row that that number has ticked upward. This means that unemployment is continuing at its highest rate in two years. Some economists are calling these numbers an indication that the SAHM rule is taking effect. We’ll have more on that below! The number of jobs in the Transportation and Warehouse industries ticked upward slightly in July.
June's Job Opening and Turnover Survey
For the month of June, job openings did adjust to a lower number as they have been this summer, but things still did not change drastically. The number of job openings shifted down to 8.2 million jobs. However, job openings drastically increased for the Accommodation and Food Services industries by 120,000. State and Local Government jobs also saw an increase by about 94,000. Jobs in Durable Goods Manufacturing and the Federal Government fell by 88,000 and 62,000 jobs respectively, wiping out last month’s gains for both industries.
The quit rate for June dropped nearly 200,000 jobs to 3.3 million, while layoffs decreased minimally to 1.5 million.
July's Jobs Report
For the month of July, Non-farm payrolls grew by 114,000, coming in way under the expected 175,000 by experts. The Reserve met just this week and decided not to make any interest rate changes at this time, but experts are still convinced that a rate hike will come before the end of the year, especially if a recession is still expected. July’s report shows unemployment rate rising again slightly to 4.3%, its highest since November 2021. The labor force participation rate for July, however, increased again slightly to 62.7%.
Last month, July 2024, the Healthcare industry, which has been steadily adding small numbers of jobs every month for the past year, added another 55,000 jobs. On average, Healthcare has been picking up roughly 60,000 jobs a month for the past year. In Social Assistance, new jobs came in at 9,000, but there was a decently sized gain in Construction (+25,000). There were losses in Information Employment (-20,000), but there were no more drastic reductions in other industries. The Transportation and Warehousing industries have been trending up recently. With a net gain of 14,000 jobs, the biggest increases have come from courier/messenger services and Warehousing and Storage. Since January of 2024, the Transportation and Warehousing corner of the market has added 119,000 jobs.
Conclusion
The July Jobs Report and the June Job Opening and Turnover Survey came out today with growing concerns for a recession coming before the end of the year. The market’s concern seems focused on something called the SAHM rule, which states that a recession is here if the three-month average of unemployment rises by over a half of a percentage point over a twelve month period. This rule has been a correct indicator of American recessions since the 1970s. Some economists say that this rule does not apply with the country still recovering from COVID-19, but, with the sharp rise in unemployment figures this month, the SAHM rule is getting more attention. Stay tuned to the LZ Blog and our Lionzone social media to see!
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Meaghan Goldberg covers recruitment and digital marketing for Lionzone. A Patterson, GA native, after graduating from both Valdosta State University and Middle Tennessee State University, Meaghan joined Lionzone in 2018 as a digital recruitment strategist before becoming the social media manager.
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