Here's What The Jobs Report Isn’t Telling You

The July jobs report showed the economy lost 23,000 jobs—far short of the 80,000 economists expected—and the unemployment rate fell to 4.1 percent, but only because the labor force participation rate dropped to 61.4 percent, its lowest level since February 2021. As labor economist Catherine Ann Edwards put it: "This has been such an incredible economy over the past year and a half, and I've described it as the closest that a $30 trillion economy could be to standing still."

What the Headlines Miss

Edwards argues that GDP growth and stock market highs are misleading indicators of economic health. Sixty to seventy percent of the U.S. economy depends on household consumption—how much people can actually afford to spend. "We've had months where GDP had a gangbusters headline number, but it was because of very odd behavior related to planning for tariffs and stocking up on inventories," she explains. The real story is in the labor market: wage growth has only intermittently outpaced inflation, hiring has cratered, and the economy has been stuck in a middle ground between free fall and firing on all cylinders.