Overworked?

The U.S. labor market is showing signs of fatigue. Nonfarm payrolls rose 73,000 in July, the lowest growth since October 2024. Or at least it would have been the lowest if not for disappointing revisions to May and June payrolls. Recent data lowered payroll growth for the two months by a combined 258,000.

The average gain for the last three months is just 35,000. For context, payrolls have increased by an average of 180,000 per month over the last three years, and 127,000 in the three-month period from February through April. Unemployment rose to 4.2% in July.

We have yet to reach panic stage, but the sharp decline in payroll growth may point to an erosion of business confidence or purchasing power.

Want stock market news and recommendations on a regular basis? Try Dow Theory Forecasts FREE for 30 days! Click here for a free trial.