MNI BRIEF: St Louis Fed Model Sees Payrolls Slowdown in July

U.S. employers in July added jobs at just half the pace they did in June, according to a St. Louis Fed analysis of high-frequency data from the scheduling software company Homebase, signaling a slowdown in the labor market recovery.

"The index continued its upward trend, albeit at a slower rate," St. Louis Fed economist Max Dvorkin told MNI, and "it's not clear whether the effects of the Delta variant are noticeable in the data."

The Homebase model predicts up to 880,000 jobs added this month, far lower than the 1.5 million job gain forecast by the index last month. "The index has been overpredicting changes in the last few months, so this figure may be an upper bound in the forecast," Dvorkin added. Actual nonfarm payrolls came in at 850,000 last month.

Real-time data from workforce manager Kronos was again excluded in the Fed bank's analysis this month as it "has some problems due to strong summer seasonality," Dvorkin said.