The July jobs report, anticipated on Friday, is expected to reveal the addition of 175,000 nonfarm payroll jobs and a steady unemployment rate of 4.1%, according to Bloomberg data.
Tara Sinclair, director of the GW Center for Economic Research, is watching the unemployment rate carefully and hopes job growth will come in strong, but believes it's more important to watch the unemployment rate.
“If the unemployment rate stays at 4.1%, it will trigger the much-discussed Sahm Rule recession indicator,” says Sinclair. “Now Sahm herself has pointed out reasons that this indicator is likely not signaling an imminent recession, but we also need to be careful not to completely neglect this signal of weakening. I’d feel a lot better if the unemployment rate ticked down to 4.0%, which could happen, but I had more optimism about the unemployment rate last month than I do this month. It’s another month where I’m going to be watching out to the second decimal to get a better sense of the direction of the unemployment rate.”
Sinclair is also watching the mix of employment gains.
“We’ve been relying on big job gains from just a few industries for quite a while now (education and health care, government, leisure and hospitality, and construction) and if one of those wobbles we could see a downside surprise in employment,” says Sinclair.
Sinclair also serves as a professor of economics and international affairs at GW. Her research models, explains, and forecasts macroeconomic fluctuations and trends. She also evaluates forecasts, particularly with respect to their role in policy and decision-making. From 2022 to 2024 she served as the Deputy Assistant Secretary for Macroeconomics in the Office of Economic Policy at the Department of Treasury.
If you’re interested in connecting with Sinclair ahead of the upcoming jobs report or for analysis following tomorrow’s release of the report, please contact GW Media Relations Specialist Tayah Frye at [email protected].
-GW-