What To Expect From The July Jobs Report

The July jobs report may post the slowest growth in 10 months, as trade wars drag down hiring, according to forecasters.

A report Friday from the Bureau of Labor Statistics is expected to show U.S. employers added 100,000 jobs, the fewest since October, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. That would be a slowdown from the 147,000 added in June. The unemployment rate is forecast to tick up to 4.2% from 4.1%, staying within the same narrow range it’s been since May 2024, signaling employers are reluctant to both hire and fire.

The report could indicate the toll that President Donald Trump’s trade wars are having on the economy. Uncertainty around trade policy and higher prices for imports due to tariffs are weighing on both business activity and consumer confidence.

“Overall, the labor market is not collapsing, but it is starting to run on tired legs,” Cory Stahle, chief economist at job site Indeed, wrote in a commentary. “In the months ahead, whether this slow fade becomes a stumble will depend on whether demand finds a second wind or if fatigue takes over.”

A slower labor market could affect the outlook for interest rates. The Federal Reserve has kept its key interest rate high this year in an effort to push inflation down to its target of a 2% annual rate. But slower hiring could force officials to consider cutting the rate to boost the job market, and stave off a sharp increase in unemployment. The central bank’s “dual mandate” from Congress is to keep employment high and inflation low. It accomplishes that mainly by adjusting the fed funds rate, which in turn influences borrowing costs on all kinds of loans.

Financial markets expect the Fed to keep the rate steady at the conclusion of its current meeting on Wednesday, and begin cutting in September, according to the CME Group’s FedWatch tool, which forecasts interest rate movements based on fed funds futures trading data.