Unemployment Still Low but Jobs Growth Slowing
Inflation Stays Lowish

Still No Recession

Today's jobs report brings more strong data and very little change from the past few reports. The unemployment rate (pictured below) remains at historically low levels, falling to 3.5% in July, and jobs growth remains robust, with 187K new jobs added.

Unemp0723

On the other hand, the strong unemployment rate is probably overstating the overall health of the labor market.  As we have talked about previously, the labor force participation rate (LFPR) remains at low levels.  You can see in the figure below that the current level (62.6%) is still way below the pre-pandemic level, which was also very low relative to U.S. economic history. 

Lfpr0723

This low LFPR indicates that there are still millions of potential workers not in the labor force.