July’s jobs report delivered a one-two punch that nobody saw coming. Not only did U.S. employers add just 73,000 jobs — well below the expected 100,000 — but sharp revisions wiped out another 258,000 jobs from the previous two months. That means the economy added just 19,000 and 14,000 jobs in May and June.
Hours after the weaker-than-expected numbers were public, President Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer, claiming the report “was rigged” without providing evidence. However, as many analysts have been quick to point out, changing BLS personnel won’t change the economic reality of the jobs reports or underlying numbers.
To make matters worse, as job growth stumbles, inflation appears to be climbing. Inflation expectations from the Federal Reserve Bank of Cleveland anticipate consumer prices rising 2.9% year over year for August, up from 2.7% in July and moving further away from the Fed’s 2% target.
This economic data are more than just numbers as they can impact your everyday life and finances in various ways. Let’s take a closer look at why they matter and what they mean for you.
Why employment numbers matter
Monthly jobs reports reflect employment trends that are an important barometer of the country’s economic health. When employers are adding jobs to their payrolls consistently, it signals that companies are optimistic about future economic growth. When hiring slows or stops, it can foreshadow broader economic trouble — recessions, business closures and rising unemployment that ripple through communities.
Employment data drives some of the most important economic decisions in the country. The Federal Reserve is tasked by Congress with what’s called a “dual mandate” of balancing both maximum employment and price stability — or keeping Americans employed and keeping inflation under control — when making important decisions about monetary policy, including Fed rate changes.
When job growth stalls, it signals potential economic weakness and typically pushes the Fed toward cutting interest rates to stimulate hiring. The CME FedWatch tool shows traders now see a 93% chance of a rate cut in September.
But the Fed faces a challenging situation when weak employment coincides with rising inflation. Cutting rates to boost job creation could make inflation worse by making borrowing cheaper and increasing spending. With inflation already above the Fed’s 2% target and trending upward, rate cuts could add fuel to the fire.
Learn more: The Fed rate cut: 5 ways lower rates will affect your wallet
What a jobs slowdown means for you
A weakening labor market can influence your job, everyday expenses and overall finances in several ways.
1. It could be harder to find a job (or get a raise)
Weak hiring could mean fewer opportunities for you to switch jobs or negotiate a higher salary or better employment terms. The number of people who’ve been out of work for six months or longer jumped by 179,000 last month to 1.8 million, a sign that finding work is taking longer than usual.
2. Gas and groceries cost more
Rising inflation hits your wallet directly as higher prices at the grocery store, gas station and everywhere else you spend money. The most recent inflation reading revealed a 0.3% increase in prices in June alone, pushing annual inflation to 2.7% — well above the Fed’s 2% target.
Food costs have been particularly painful for the average American household, rising 3.0% from last year, with eggs increasing a whopping 27.3%, while rent and housing climbed 3.8% annually.
3. Your savings will earn less interest
Banks typically lower the rates they pay to savers when the Fed reduces its key rate, meaning you’ll earn less interest on your money over time. Those high-yield savings accounts (HYSAs) and certificates of deposit (CDs) paying out 4% APY aren’t likely to last long after a Fed cut.
Learn more: How the Fed rate affects every type of bank account
How to prepare for the months ahead
Making these three key money moves right now can help you stay ahead of whatever comes next.
1. Build a strong emergency fund
When employment slows, an accessible emergency fund is an essential safety net. Financial experts typically recommend three to six months of expenses, but if you’re worried about losing your job, you might want eight to 12 months in a flexible account — like a high-yield savings account earning 10 times that of your everyday account — for extra peace of mind. It could buy you time to find the best fit rather than take the first job offer that comes along.
Learn more: How to build an emergency fund
2. Lock in today’s highest CD rates
While a Fed rate cut is expected as soon as September, you can get ahead of lower yields by locking in today’s highest rates on certificates of deposits. Right now, you can find CDs offering rates of 4% APY or higher on terms of six months or longer.
Or consider laddering your CDs with different maturity dates so you’re not locked into one rate for too long. For example, you might split your savings between six-month, nine-month and 12-month CDs. This strategy gives you access to some money every few months while capturing today’s higher rates before they drop.
Learn more: What to do when your CD matures
3. Get ahead of higher prices
Inflation may continue climbing as businesses pass along to consumers higher costs resulting from tariffs and other economic pressures. It means your money is likely to lose some of its value every month it’s earning less than the inflation rate.
Take time to audit your spending and find where costs are quietly climbing. Start with your monthly expenses, like phone plans, streaming services and auto insurance, calling each company to ask for lower rates. If you don’t get the answer you want, shop around for cheaper alternatives.
Consider putting some of your savings in diversified stock market funds, which have historically outpaced inflation over the long term. Work with a financial advisor to determine what assets make the most sense for your budget and financial goals.
Learn more: How I started investing with just $100 — and why you shouldn’t wait
More stories about the Fed and your personal finance
How the Federal Reserve affects mortgage rates
How to prepare for a Fed rate cut (and 4 money moves you should avoid)
Top banking mistakes that could be costing you money
8 money lessons from the 2008 Great Recession that apply today
5 smart moves after you’ve hit $10,000 in savings
Editorial disclaimer: Information on this page is for educational purposes and not investment advice or a recommendation to buy any specific asset or adopt any particular investment strategy. Independently research products and strategies before making any investment decision.
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