American payrolls fell by 23,000 in July, and traders abandoned bets on another Federal Reserve rate rise

The United States economy lost 23,000 nonfarm payroll jobs in July, compared with forecasts of roughly 80,000 new jobs. Government employment fell by 53,000, while private payrolls rose by 30,000. The revisions to prior months mattered more than the headline number: May's gain was cut from 129,000 to 63,000, and June's from 57,000 to 20,000, leaving average monthly job creation over the past year at about 34,000.

The unemployment rate fell to 4.1 percent from 4.2 percent, but the decline happened because fewer people were working or looking for work, not because hiring improved. Average hourly earnings grew 3.2 percent over twelve months, which CNBC reported as the slowest pace since May 2021. A labour market that is cooling because people are leaving it, rather than because employers are hiring less, gives less support to consumer spending.

Interest rate markets reacted immediately. Traders cut the probability of a September Federal Reserve rate increase from 57 percent to 44 percent. The two year Treasury yield fell about 4 basis points to 4.203 percent, and the ten year yield settled at 4.657 percent. The dollar index dropped 0.37 percent to 99.56.

Gold and silver moved in the opposite direction from the dollar. Silver rose about 4 percent to a six-week high near 63.50 dollars an ounce and gold held above 4,300 dollars, closing around 4,315 dollars. Bitcoin's price did not rise with them. It traded near 64,700 dollars on Friday morning according to Fortune, far below the level above 120,000 dollars it reached last October. Investors seeking protection against currency risk are moving into precious metals, not into bitcoin.

Stock markets treated the same data as good news. The STOXX Europe 600 closed 0.3 percent higher at 660.25 points, a fourth consecutive weekly gain, helped by second quarter profits that the Financial Times reports are on track to rise 22 percent across the index. The gap between weakening labour data and rising stock prices rests on one assumption, that the central bank will ease policy before corporate profits weaken.