The latest employment figures “shows us what we already knew,” according to First American economist Ksenia Potapov: that the labor market is cooling, but at an extremely slow pace.
Last month, the Federal Reserve introduced its 11th interest rate hike since March of last year – and while that move may accelerate the pace of the jobs market’s slowdown, it’s still too early to tell, Potapov said.
The jobs bump in the construction space, meanwhile, was especially noteworthy. “Employment in this interest-rate sector continued to trend up in July,” Potapov noted. “Residential construction is defying expectations, largely because of how little housing supply is available for sale.”
How will the Federal Reserve view the latest labor market figures?
Fannie Mae’s deputy chief economist Mark Palim said the economy’s modest softening was in line with expectations, with the number of workers who hold a part-time job but would prefer full-time employment dropping by nearly 200,000 – “a positive sign for labor demand.”
The “robust” job gains in the construction space, he added, would prove helpful to homebuilders in the face of persistent supply constraints, although he also sounded a note of warning on wages, which posted year-over-year growth of 4.4%.
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