The labor market, once the star of the economic stage, just flubbed its latest performance — and investors are taking note.
August’s Employment Report landed with a thud: just 22,000 jobs added, a far cry from the 75,000 Wall Street was banking on. Health care and social assistance carried the weight, while manufacturing and the federal government trimmed their payrolls. Cue the headline: unemployment up to 4.3% — the highest since 2021.
Even paychecks are cooling. Average hourly earnings rose 3.7% year-over-year, slipping from last month’s 3.9% and marking the softest pace since 2021. Translation: wage power is losing its shine.
The JOLTS report confirmed the slowdown. July closed with 7.2 million job openings — the lowest in ten months and weaker than expected. For perspective, the ratio of job vacancies to available workers has plunged from over 2.0 in early 2022 to nearly 1.0 today. Fewer openings = less pressure on employers to sweeten salaries.
But not all was doom and gloom. The Institute of Supply Management delivered a plot twist: the services index climbed to 52.0 (expansion territory), while manufacturing nudged up to 48.7 (still contracting, but less so). Services remain the economy’s MVP, while higher tariffs on foreign goods could eventually breathe life into U.S. factories.
💡 The bottom line: The labor market is wobbling, mortgage rates are sliding to their lowest levels this year, and the Fed is watching every beat. Investors may see weakness, but buyers eyeing a mortgage? They’re getting a gift.
