The US economy shed 23,000 jobs in July, the first monthly decline in nonfarm payrolls that caught most forecasters flat-footed. Wall Street had penciled in gains somewhere between 80,000 and 95,000. Rick Rieder, BlackRock’s global chief investment officer of fixed income, looked at the same numbers everyone else did and called them “unremarkable.”
His reasoning: companies aren’t cutting workers because demand is cratering. They’re cutting workers because they don’t need as many of them anymore. In a Bloomberg Television interview, Rieder framed the payroll miss as evidence of what he called a “productivity revolution,” driven by advances in technology and artificial intelligence that let businesses do more with fewer people on the clock.
The numbers behind the narrative
July’s decline didn’t materialize out of nowhere. June’s payroll gain was revised downward to as low as 20,000 jobs, depending on the revision cycle. Average monthly job gains over the prior 12 months sat at roughly 34,000, a figure that would have seemed alarmingly low just a couple of years ago.
Yet the unemployment rate held steady at 4.1%. That’s the detail Rieder leaned on hardest. If the economy were genuinely weakening, you’d expect layoffs to push unemployment higher. Instead, the rate stayed put, suggesting that the labor market is tightening from the supply side rather than collapsing from a demand shock.
