Nonfarm payrolls dropped by 23,000 in July, and BlackRock’s top fixed-income executive barely flinched. Rick Rieder, the firm’s global chief investment officer of fixed income, appeared on Bloomberg on August 7 and summed up the latest employment data in a single word: unremarkable.
The numbers behind the nonchalance
July’s payroll decline of 23,000 came on the heels of a June report that added just 57,000 jobs, itself a miss against expectations of roughly 83,000. The unemployment rate held steady at 4.1%.
He pointed to nominal GDP growth tracking around 6%, a figure that sits comfortably above what you’d expect from an economy supposedly struggling. The gap between weak employment and strong output is, in Rieder’s telling, the signature of something structural rather than cyclical. Companies are getting more done with fewer people, and that changes the math on what a “healthy” jobs report even looks like.
Rieder described this dynamic as a “productivity revolution,” driven by advances in technology that allow businesses to generate more output per worker.
