The latest economic report card is in, and it’s not making the honor roll this time. Contrary to expectations, the US added just 114K jobs, the slowest since the pandemic rebound. The unemployment rate increased to 4.3% as more people entered the job market, but not due to a rise in job losses. This rate is already above the 4% the Fed anticipated by the end of 2024.

• Job growth was concentrated in education and health services (+55K), and construction (+25K) — while the information sector saw a decline (-20K).
• The number of part-time workers rose to 4.57M, the highest since June 2021, and long-term unemployment reached 1.54M, the most since Feb. 2022.

Hard landing zone ahead: The surge in unemployment could trigger the Sahm Rule, a reliable indicator of an impending recession. This data supports the possibility of a September rate cut — which KPMG Chief Economist Diane Swonk says would take “a major reversal in the inflation data to take September off the table.” LPL Financial’s Jeffrey Roach notes, “The latest snapshot of the labor market is consistent with a slowdown, not necessarily a recession. However, early warning signs suggest further weakness” (CNBC).