Futures inch higher as jobs data indicate labor market weakness
Last updated: 09:05 07 Aug 2026 EDT, First published: 07:48 07 Aug 2026 EDT
9:00am: Payrolls unexpectedly contract in July
The US labor market unexpectedly weakened in July as nonfarm payrolls fell by 23,000, marking the first monthly decline in employment in years and missing expectations for an 80,000-job gain. Private payrolls increased by just 30,000, well below forecasts of 82,000, while May and June payrolls were revised down by a combined 103,000 jobs.
The unemployment rate edged down to 4.1% from an expected 4.2%, although average hourly earnings rose just 0.1% month-over-month and 3.2% year-over-year, both below forecasts. The labor force participation rate slipped to 61.4% from an expected 61.6%, while the average workweek held steady at 34.3 hours.
The weaker-than-expected employment report prompted investors to sharply scale back expectations for a Federal Reserve interest rate hike in September, with market-implied odds falling significantly following the release.
Payrolls day
Good morning, and welcome to payrolls day, the Friday each month when Wall Street stops talking over itself to stare at one spreadsheet.
US stock futures nudged higher ahead of the July jobs report, due at 8.30 am eastern time.
Dow futures were essentially flat, the S&P 500 added 0.2% and the Nasdaq-100 rose 0.5%, which counts as enthusiasm after Thursday's muddle.
Economists surveyed by Bloomberg expect 80,000 positions were added last month, with unemployment parked at 4.2%.
Not thrilling, but the labour market has been quietly stable while everyone shouted about inflation and artificial intelligence spending.
The Federal Reserve will be reading closely as it weighs its next move on interest rates.
Oil, meanwhile, kept climbing because the US and Iran still have not shaken hands.
An Iranian semi-official news agency reported explosions in the Strait of Hormuz on Thursday night, blamed on the interception of "hostile targets".
Iran and Oman are still working towards reopening the waterway, though the latest word is US and Israeli ships need not apply.
What all that does to inflation expectations is Friday's other question, with the New York Fed's one-year survey also landing.
Earnings are thin: Vistra, Oklo, Under Armour and Wendy's.
