Financial Jobs Decline in July
The U.S. economy saw a slowdown in job growth in July, with the U.S. Bureau of Labor Statistics reporting a loss of 23,000 non-farm jobs. This comes after revised numbers for May and June, which reduced the total number of jobs by 103,000.
Financial activities lost 14,000 jobs, with credit intermediation and related activities losing 9,000, while insurance carriers and related activities lost 7,000.
The three-month average payroll gain collapsed by more than a third, according to Frances Donal, chief economist at RBC, and Mike Reid, head of US economics at RBC. They noted that net revisions to the prior two months subtracted more jobs than were created in June.
One sector that stood out in July was healthcare, which added 22,000 jobs. However, the financial sector continued to struggle, with the sub-sector for securities, commodity contracts, funds, trusts, other financial vehicles, investments, and related activities adding only a modest 1,000 jobs.
The ADP National Employment Report for July painted a slightly more optimistic picture, estimating a gain of 44,000 in U.S. private employment. According to the report, financial activities gained 10,000 jobs, while education and health services added an estimated 36,000 new jobs.
Job growth occurred mainly in lower-income households, which saw an estimated 2% year-on-year growth, according to the Bank of America Institute’s Employment Report for July. The report also noted that the share of fully employed clients active in the gig economy has continued to grow over the past three years.
Some households are using gig work to supplement their regular paychecks. In June, nearly half of the gig workers earned income from gig work for only one month in the past 12 months, while 74% of gig workers earned income for three months over the same timeframe.
The gig work that has seen the greatest growth in participation since 2024 is social commerce, as thrifting becomes increasingly important to households. The number of households seeking to make a little extra via ridesharing, food delivery, content creation, and vacation rentals has returned to close to 2024 levels, with little change.
The slowdown in job growth and the rise of the gig economy may have significant implications for the U.S. economy. As the economy continues to slow down, more people may turn to gig work to supplement their income, which could lead to a shift in the way people work and earn a living.
The trend of using gig work to “top up” regular paychecks will continue, especially among lower-income households. This could lead to a more flexible and dynamic workforce, but it also raises concerns about job security and benefits.
For now, the U.S. economy remains in a state of flux, with the slowdown in job growth and the rise of the gig economy being just two of the many factors at play. As the situation continues to evolve, it will be important to monitor the numbers and adjust accordingly, considering factors such as fintech regulatory developments and their potential impact on the economy.
The U.S. economy is influenced by various factors, including business leaders’ decisions and government policies.
