The July jobs report offered nothing but bad news with just 114,000 jobs added when the US Department of Labor (DOL) expected 175,000. And, the U.S. jobless rate ticked up to 4.5% - the highest since October 2021.
The poor July report follows a big downward revision for June, that added 179,000 jobs, compared to a previously reported increase of 206,000. That's a revision downward of 27,000 jobs.
The Dow Jones Industrial Average (DOW) plunged as much as 1000 points in early trading and closed 611 points down (1.5%) as Friday ended. The S&P 500 Index dropped 1.8% on day end and the Nasdaq was down 2.4% driven largely by poor earnings reports from Amazon, Tesla, Intel, and other tech stocks.
Lee Zeldin reposted Heather Long from X, “Wow. 4.3% unemployment in July. (A big jump up from 3.5% in July 2023). The July jobs report has triggered the "Sahm Rule" indicating we could be in the early stages of a recession. It's possible this time is different. But this is a big warning sign that the job market (and possibly broader economy) is really slowing fast.”
Everyday working Americans already know the tough economic situation we are in. Every trip to the supermarket and insurance bill that comes in the mail takes a bigger and bigger chunk of each paycheck. Since mid-2020 food prices are up 19% and the cost of taking your family out to dinner is up 24%. Homeowner’s insurance is up over 11% and auto insurance has risen even faster. Auto insurance in NY is up on average 14.2% - second only to Michigan.
Bankrate estimates the national average cost of full coverage car insurance in 2024 increased 26% - six times faster than overall inflation. Insurance, food, and housing are where the rubber meets the road for America’s families.
Jacob King remarked on X, “Over $2.9 trillion has been wiped out from major indices and stocks this morning due to growing fears of a global recession. This is the worst day for stocks since March 16, 2020, during the COVID-19 pandemic fears.”
John Fredericks said on his radio show, “CRUSHING JOBS REPORT ENDS DEMOCRATS’ HARRIS HONEYMOON The devastating July jobs report is bringing people back to the reality of the Biden-Harris economy and how the only people benefiting from it are illegal immigrants coming over the wide open southern border.
What does this mean for the economy and any Federal Reserve action on interest rates? Is a recession inevitable??
Many say any soft landing for the economy is further out of reach now previously than hoped. The Kobeissi Letter says we are likely headed toward a recession.
“BREAKING: The 10-Year Note Yield crashes over 15 basis points after a much weaker than expected July jobs report. The 10-year note yield yield is now down 55 BASIS POINTS in ONE WEEK. For the first time since March 2020, bond markets are pricing in a potential recession,” says The Kobeissi Letter on X.
Economic analysts say the labor report fell short on practically every single metric they look at. Fears of a rapidly slowing economy are at the front of everyone’s mind. The slowdown was in part planned by the Fed to slow inflation, but many think that Fed Chairman Jerome Powell waited too long to cut interest rates and we are in for a rough landing for the US economy. The Fed is widely believed to be considering a cut in September, but will it be too late to forestall a recession? Is an economic stall about to hit us – and hard?
Brian Jacobsen, Chief Economist at Annex Wealth Management, said, “The Fed is seizing defeat from the jaws of victory. Economic momentum has slowed so much that a rate cut in September will be too little too late.”