On the July Jobs Report

73,000 net payrolls is about the dial-tone now, given no immigration growth. But very large revisions to May and June payrolls leave the labor market looking very weak, with almost no net payroll gains now reported for either month. Powell looks “too late,” and his major internal competitor, Waller, is looking downright prophetic with his talk of labor market “stall speed.” The revisions fell disproportionately on the government sector, and on the private services sector. We don’t see how to tell a tariffs story from the revised data, pro or con. Immigration continues to run in reverse, with half the self-deporting immigrants leaving their jobs behind. The native-born population has kept up so far, but this can’t go on. This changes the balance of risks at an FOMC which, according to Powell at least, was very hawkish. As we have expected, two rate cuts by year-end are back on the table.