Printing at 157K (170K private), the July jobs report was a disappointment to the expected 193K number, even if the unemployment rate dipped slightly, and nominal (if not real) hourly earnings came in line and unchanged from last month.
However, according to SouthBay Research the reason wasn't broad-based weakness, but rather there were two very specific reasons for today's jobs weakness:
The liquidation of Toys "R" Us contributed some 31K jobs to decline. The chart below shows the sharp drop in the "Retail Trade: Sporting Goods, Hobby, Book, and Music Stores" category.
Separately, School Vacation timing resulted in another 40K jobs lost.
As Southbay also notes, excluding these two categories, there was Broad Consumer Strength:
- Retail: +39K before ToysRUs layoffs
- Leisure & Hospitality: +40K
- Education layoffs: School layoff timing hits payrolls -40K: Bus Drivers (-15K) and Education (-11K) and Local Government Education (-14K)
Meanwhile, the big drivers for job growth were all there:
- Construction: +19K
- Manufacturing: +37K
- Professional Services: +51K
- Healthcare: +34K
A more detailed breakdown of jobs additions follow.