Charting the Global Economy: US Employment Declines Unexpectedly

44rz51l]tgkoed6yn0tlur12_media_dl_13.png Bloomberg Economics

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(Bloomberg) — A surprise drop in US payrolls renewed worries about the job market in the world’s largest economy, suggesting employers are growing cautious amid rising prices and fallout from the Iran war.

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In the UK, employment numbers in a private-sector survey are even more negative. The downturn in the country’s services sector has lasted as long as the slump during the 2008-09 financial crash.

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Meantime, the Japanese yen on Tuesday snapped its best four-day rally in two years following a historic intervention between Japan and US to lift the former country’s currency. Both nations signaled a willingness to continue their support of the yen. 

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Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

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US & Canada

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US employers unexpectedly cut jobs in July and hiring in the prior two months was revised lower, suggesting the labor market is weaker than previously thought after surprising strength earlier this year. Payrolls decreased 23,000 following a combined 103,000 downward revision to the May and June figures. The unemployment rate fell to 4.1% as labor force participation continued to slide, and wage growth slowed.

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The Canadian economy added a surprise 75,100 jobs last month while the unemployment rate hit its lowest level in two years — the latest evidence the economy is on a recovery path.

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Black mothers with young children are leaving the workforce at an alarming pace. Labor force participation among Black mothers aged 25-54 with children under 5 has fallen 11.5 percentage points in just three months, dropping to its lowest level in over 30 years, according to an analysis of BLS data by Lauren Bauer, an economics studies fellow at the Brookings Institution.

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2026 was supposed to be the year that sidelined homebuyers got some relief. Then, the Iran war and fears about rising inflation came along. As of Aug. 6, mortgage rates had climbed 71 basis points since the war began in late February. The national average rate on a 30-year fixed mortgage rose to 6.69%, a fresh high for the year, according to Freddie Mac.

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Europe

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Britain’s two-year jobs market downturn has lasted as long as the slump seen during the global financial crisis as firms cut costs and turn to artificial intelligence, according to a closely watched survey. S&P’s purchasing managers’ index showed services firms and employers across the wider private sector reducing headcount for a 22nd straight month in July.

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German industrial production grew for a third month, another sign that Europe’s largest economy is resisting the drag from the Iran war. The main driver of the growth was the automotive sector, which increased 3.6% from a month earlier. 

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Extreme heat has killed more than 25,000 people across Europe this year, according to the latest available data compiled by Bloomberg. Germany recorded the highest toll, with an estimated 11,900 excess deaths linked to heat since April, according to the Robert Koch Institute.