Economists Expect Hiring to Hit 10-Month Low
The upcoming U.S. jobs report is forecast to show a marked slowdown in hiring, with economists predicting that only 100,000 jobs were added in July. This would represent the weakest employment growth since October and a decline from the 147,000 jobs reported in June. The unemployment rate is expected to edge up to 4.2%, slightly above the previous 4.1% figure, continuing the narrow range observed since mid-2024.
The Bureau of Labor Statistics is scheduled to release the report on Friday. If confirmed, the data may signal mounting pressure on the labor market stemming from ongoing trade conflicts and tariff policies introduced earlier this year.
Trade Policy Adds to Economic Uncertainty
Hiring slowdowns are being attributed in part to President Donald Trump’s trade actions, including sweeping tariffs on key imports. The added costs and uncertainty have reportedly dampened business activity and consumer confidence, making employers more cautious about workforce expansion.
“The labor market is not collapsing, but it is starting to run on tired legs,” said Cory Stahle, chief economist at job platform Indeed. The trajectory of hiring in the coming months may depend on whether demand stabilizes or softens further due to ongoing economic headwinds.
Potential Implications for Federal Reserve Policy
A weakening labor market could influence future decisions by the Federal Reserve, which is currently maintaining elevated interest rates to combat inflation. The central bank aims to balance stable prices with full employment — a dual mandate that could prompt rate adjustments if job creation continues to decline.
So far, the Fed has held its benchmark rate steady, and financial markets widely anticipate no change at the conclusion of the July policy meeting. However, weaker labor data may increase the likelihood of a rate cut in September, as officials assess how best to support economic stability.
Markets Watch Fed and Job Data Closely
Investors are closely monitoring the interplay between inflation trends, interest rates, and employment figures. The CME Group’s FedWatch tool indicates that futures traders currently expect the first rate cut to come as early as September, depending on upcoming economic signals.
With tariffs continuing to affect various sectors and concerns about economic fatigue growing, Friday’s labor report will be a key indicator of where the U.S. economy stands heading into the final stretch of the year.