Economists forecast the July jobs report will show further signs of a cooling labor market as US government policy uncertainty, particularly around tariffs and immigration, continues to weigh on business decisions.<\/p>\n
Nonfarm payroll employment is projected to have risen by 117,500 in July, down from 147,000 in June, according to consensus estimates from FactSet. The unemployment rate is expected to tick up to 4.2% in July from 4.1% the previous month.<\/p>\n
\u201cWe think we will continue to see softening in the economy, especially in the private cyclical sectors of the economy,\u201d says Kathy Bostjancic, chief economist at Nationwide. \u201cThe private sector remains sluggish, and the knock-on impact is that you don\u2019t get a lot of aggregate income gains.\u201d<\/p>\n
While tariffs seemingly haven\u2019t had as much impact as expected, Bostjancic says the effect is nuanced. \u201cI think a lot of the uncertainty around the tariffs concerned the impact on overall demand for companies\u2019 goods and services,\u201d she says. Rather than triggering widespread layoffs, firms have adopted a cautious stance toward adding new jobs.<\/p>\n
Headline Fatigue: Does the Stock Market Care About Tariffs Anymore? July Jobs Report Forecast Highlights<\/p>\n Watching Private Sector Job Growth<\/p>\n While overall jobs growth remains relatively healthy, Bostjancic highlights concerns around jobs in economically sensitive cyclical industries. \u201cWe think we\u2019re going to continue to see softening,\u201d she says. \u201cThere\u2019s been no net new jobs added in the sector.\u201d<\/p>\n Meanwhile, despite an increase in average hourly earnings, Bostjancic observes that overall income gains remained \u201cbasically flat\u201d due to the decline in working hours. She says the weakness in the private cyclical sector is not just an isolated trend, but offers insight into the broader private economy. \u201cIt tells us the overall economy, at least in the private sector, is sort of sluggish. Overall job growth remains soft, and the knock-on impact is that you don\u2019t get a lot of aggregate income gains.\u201d<\/p>\n![\"Collage-style](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/ESUEIHGQORBQZOHN623DIYWP3A.png\")
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