August 11, 2025

Hi, everyone. My name is Taylor St. Germain with ITR Economics, and welcome to this edition of TrendsTalk. We at ITR are your apolitical and unbiased source of economic intelligence. And today, I wanted to talk about the jobs report from July.

There were a lot of folks who were very concerned after that job report came out, especially as a result of the revisions to previous months. And of course, as we all know, now this week, it resulted in the firing of the BLS commissioner. So there’s a lot going on here. And as usual, our job at ITR is to dig through the noise and the headlines to report what we’re actually seeing from a data perspective. And we wrote a blog about this, and I wanted to just highlight some key points.

The month of July, we added 73,000 jobs. But what really got the attention was that the May and June totals were revised downward by a combined 258,000 jobs. So that’s a pretty big downgrade to previous months, which highlights that the labor market is clearly weakening. The unemployment rate rose from 4.1% to 4.2%. Now, just a couple of points I wanted to make. ITR evaluates our data on a non-seasonally adjusted basis. The non-seasonally adjusted data, we find is far more accurate and less subject to revisions than the seasonally adjusted counterpart. Now, we at ITR, I should say, also prefer to analyze the Nonfarm Private Sector Labor market instead of the headline numbers that include both Nonfarm and government employment. The reason being is in July, the government component accounted for 12,000 of the jobs that were lost.

So let me highlight this data on an NSA basis, a not seasonally adjusted basis. The rise in quarterly employment is up 1.9% from March to July. That’s a slightly weaker increase than normal, but it’s similar to increases we’ve seen in the past and similar to increases during times where we saw GDP grow between 1.2% and 4.3%. I’ll also highlight that July employment is up about 1% from last July. That year-over-year change in employment has been running between about 1% and 1.3% since January 2024. That’s all within the range of normalcy. And I’ll also highlight that the number of people employed in July is at a record high. I also think it’s important to note that the headline jobs, it’s a measure of new jobs created, not overall employment levels. So when we think of the near term, the number of jobs being filled from one month to the next will be consistently lower than normal due to the immigration policy and how strict we are in immigration, the net negative immigration that’s limiting our labor availability.

I will also finish off by adding that the labor market, folks, is a lagging indicator. It is not a leading indicator. We do not use the labor trends as a way to forecast future economic growth. What’s happening in the labor market now is a reaction to previous softer GDP quarters. So again, we’ve talked about this on the podcast in the past, but please do not use the labor market as a leading indicator or for sentiment of what the future economy looks like. Yes, the jobs numbers for July wasn’t great news. It does signal that the labor market’s experiencing slower growth, but we’re not in free fall and ITR is not forecasting a recession as a result of this labor report. Let’s not overreact to a single data point, a single month’s data point, and let’s continue to look to the future in which we see many of our leading indicators pointing to growth.

Now, another thing I’ll just add is, hey, the labor market is weaker, this is a great time to hire in advance of all the growth that we see coming our way, especially as we move into 2026.

Take advantage of the news out there. Don’t overreact to it. That’s my message as we digest this July jobs report. We’ll continue to come back with more information on the labor market, but for now, I hope you found this helpful. Please remember to like and subscribe to TrendsTalk wherever you listen to your podcasts, and I look forward to talking to you all in the next one. Thanks so much. Take care for now.