Stocks move higher after July jobs report dip
US equities were in the green Monday after July’s labor report miss sent markets lower

Federal Reserve Vice Chair for Supervision Michelle Bowman | The Federal Reserve/"DSC_7693″ (
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It’s bounce-back day on Wall Street after Friday’s jobs report-fueled dip.
After the first three hours of trading Monday morning, the S&P 500 and Nasdaq Composite indexes were up 1.3% and 1.8%, respectively. I’m not shocked to see things back in the green, but I’m curious as to how long the rally may last.
Investors are going to be watching for any additional fallout from the July jobs report. As a reminder, Friday’s release showed the economy added just 73,000 new positions last month (compared with expectations for 104,000).
May and June also received significant downward revisions (a combined -258,000 positions), marking the biggest revision since 2020. The unemployment rate was unchanged at 4.2%.
The numbers were not good for stocks, although the report did help boost expectations of a September interest rate cut from the Fed.
Chair Powell has stressed in the past that he’s primarily concerned with the unemployment rate as opposed to the number of positions added. Last week’s Fed decision (in which it opted to once again hold interest rates steady) came with an addendum we haven’t seen in decades: a double dissent.
JPMorgan chief US economist Michael Feroli called the two dissenting opinions in last week’s Fed decision (from Governors Waller and Bowman) a “job application,” and I’d have to agree. With Powell’s term set to expire next May (and Trump’s vocal distaste for Powell), the position is up for grabs.
Here’s an excerpt from Waller’s opinion:
“While the labor market looks fine on the surface, once we account for expected data revisions, private-sector payroll growth is near stall speed, and other data suggest that the downside risks to the labor market have increased. With underlying inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate.”
From Waller’s mouth to the president’s ears? We’ll have to wait and see.
Aside from Powell, there’s another (former) government official on Trump’s bad side: Bureau of Labor Statistics Commissioner Erika McEntarfer. He fired her on Friday following the release of July’s employment report, accusing her of manipulating the data to show a bias against his administration.
“A lengthy history of inaccuracies and incompetence by Erika McEntarfer, the former Biden-appointed Commissioner of the Bureau of Labor Statistics, has completely eroded public trust in the government agency charged with disseminating key data used by policymakers and businesses to make consequential decisions,” the White House wrote in a Friday statement.
The BLS earlier this year said it would have to reduce its data collection on consumer prices, which impacts its CPI report. Last week the agency clarified that the changes were implemented “to align survey workload with resource levels.”
The situation adds a layer of political complexity to Friday’s disappointing report, and takes a hit to investor confidence in data. Noelle Acheson, from Crypto is Macro Now, put it best in her note today:
“So, will the next BLS commissioner be able to avoid large revisions going forward? Obviously, they’ll have to if they want to keep their job, which elevates the temptation to publish late or to suppress new information as it comes in. Neither will be an improvement on the current situation.”
We’ll be on “labor report fallout watch” all week, so keep an eye on your inbox.
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