WSJ What’s News - U.S. Shed Jobs in July, Lowering Expectations of a Fed Rate Hike

Episode Date: August 7, 2026

P.M. Edition for Aug. 7. The U.S. lost 23,000 jobs last month, surprising economists who had expected a gain. WSJ economics reporter Matt Grossman discusses the sectors that saw the biggest losses and gains, and what this latest report means for the Fed. Plus, an appeals court rules that construction on President Trump’s planned White House ballroom must stop. And as New York City has rolled out its new pied-à-terre tax, wealthy homeowners are pushing back. We hear from Journal real estate reporter Rebecca Picciotto about the ways they’re doing it, from lawsuits to potential loopholes. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The U.S. lost 23,000 jobs last month, a surprise to economists and a sign that maybe the economy isn't as strong as it seems. Plus, an appeals court says construction must stop on President Trump's White House ballroom project. And in the week since New York City's new Pieta tear tax went into effect, well, the residents are finding ways to push back or get around it. So far, a lot of these lawyers and financial advisors are kind of in the position of putting it, lightly to their clients. Most of these strategies are not going to get them off the hook. It's Friday, August 7th. I'm Alex O'Seuf of the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. The U.S. labor market unexpectedly shed jobs last month. The Labor Department's latest jobs

report shows that it lost 23,000 jobs, a big shortfall versus the gain of 83,000 that economists had expected. For more, I'm joined out by WSJ economics reporter, Matt Grossman. Matt, a surprise loss here. Where in the labor market did we see these losses? The government sector was one of the weaker areas in July. The economy lost jobs in leisure and hospitality. There were small gains in manufacturing, but only pretty small. And retailers also shed jobs. There was decent hiring in the construction sector that has been boosted over the past few months by the incredible surge of investment in AI infrastructure. There was moderate hiring in private sector healthcare jobs, hospital workers, home health care aides. But that's been such a strong source of job growth over the past

year that even a moderate reading there is a bit of a slowdown from some of the momentum we'd seen in past months. We also saw this downward revision. for the May and June numbers, the labor market had seemed to be on an upswing for the past few months, but is that in doubt now? It definitely casts the past few months in a new light.

Coming into this report, we'd had a few fairly strong months. The downward revisions we got today cast a lot more doubt on that story. It's a lot harder to make the case that we're seeing an upswing in a big surge of new hiring momentum. So compared with where,

we thought we were, it looks more likely that at best we're sort of moving sideways and this kind of stable, moderate hiring and perhaps at risk of a further slowdown. So, of course, Matt, my question now is going to be what this means for the Fed. I mean, we're still in this period where inflation is a concern. Some officials had already been considering a rate hike at the meeting next month. What does this mean for them? Inflation has been a problem for the, the Fed for now five years, and a lot of officials are losing patience with that. They're saying that price increases have been above our target for so long that we need to take action and raise rates, and that was the top of the agenda for the September meeting. That probably doesn't change with this

report, but if you're a Fed official who has had some concerns about raising rates or isn't sure that it's necessary, a weaker looking labor market might add to your doubt. So I think for now, that debate is still very much in play. There's still a lot of data to come before the September meeting. We have one more jobs report and two more months of inflation data. So today might temper expectations of a rate hike a little bit, but when the Fed actually meets in mid-September, they're going to have a lot more information than we do today so far. USA economics reporter, Matt Grossman. Thank you, Matt. Thank you. U.S. indexes were up today, as the jobs report made traders scale back their expectations for a rate hike at the Fed's next meeting.

The NASDAQ led the gains, closing up 1.3 percent, and the S&P 500 rose 0.6 percent to a new record. Treasury yields edged lower today, and oil prices nudged higher. U.S. stock indexes also wrapped up their biggest weekly gains in months. For the week, the Dow was up 3 percent, and the NASDAQ more than 5 percent. The S&P 500 added 3.6% for the week and is up 13% for the year so far. Now three pieces of news out of Washington. A key senator said today that he would vote to confirm Todd Blanche, President Trump's pick for Attorney General. Louisiana Republican Senator Bill Cassidy said that, while Blanche isn't a perfect pick, another attorney general could be worse. All considered, I will vote for Mr. Blanche.

The announcement clears the path for Blanche's confirmation. in the role, which was called into question earlier in the day after Alaska Republican Lisa Murkowski became the second senator to say she would oppose Blanche's nomination. Among her concerns was that Blanche would go back on his promise to scrap the controversial anti-weaponization fund. Senate leaders have not yet announced the timing of a confirmation vote. A federal appeals court today stopped above-ground construction on President Trump's planned White House ballroom. In a two-to-one ruling, a panel of the Court of Appeals for the District of Columbia Circuit said that only Congress, not the president acting alone, can approve demolitions or design changes to the White House. The court put its

ruling on hold for two weeks to give the Trump administration a chance to appeal to the Supreme Court, which President Trump said on social media that his administration would do immediately. And President Trump is reviving his attempt to fire Federal Reserve Governor Lisa Cook. A top aide to Trump sent a letter to Cook this week saying the president was thinking of firing her based on the earlier allegations of mortgage fraud. The letter asked her to provide a written response by the end of August. In June, the Supreme Court blocked Trump from firing Cook without meaningful scrutiny. Through her lawyer, Cook again denied the allegations and said that she would challenge

the latest attempt to remove her. Coming up, from loopholes to lawsuits, wealthy New Yorkers are pushing back against the city's new Pietater tax. That's after the break. We're exclusively reporting that a drone laden with explosives that shut down an airport in eastern Germany earlier this week likely belongs to the Russian government. That's according to U.S. officials familiar with intelligence reports about the incident. Russia's alleged link to the incident comes as U.S. intelligence found Russian President Vladimir Putin poses an increased threat to NATO's eastern flank, as we told you about on this morning show. The Russian embassy in Washington didn't immediately respond to a request for comment.

Puerto Rico has begun rationing water across the island amid an intense drought. Some residents won't have water for 48 hours at a time. The rationing is expected to last for the rest of the month. Officials urge residents with water to store only what's necessary and use it only for essential household tasks. In New York City, a group of aggrieved homeowners are suing to delay Mayor Zoran Mamdani's looming piettaire tax. It's an early legal challenge to the tax on homes worth $5 million or more, where the owner is not a primary resident. of New York City. And it's just one of the ways people are pushing back against the tax since it went into effect about a month ago. Rebecca Pachoto covers real estate for the journal. Rebecca, what is this

suit alleging? The suit is arguing that to date, the implementation of the tax has been improperly executed. Basically, they're arguing that the Department of Finance had an obligation to use all the information at their disposal, to verify who would be subject. to the tax. And instead, the Department of Finance rushed the process, the suit claims, and ended up casting too wide a net. And they've misidentified homeowners who have been long-time residents. So this lawsuit is just one of the ways that people are trying to push back against this new tax. You've also reported that they're finding creative ways to try to dodge it. What are some of those ways? Yeah, I would say people are in the brainstorming phase.

You know, they're calling their state lawyers and tax attorneys and floating some interesting ideas, setting up offshore corporations in the Cayman Islands, hiring a stranger to pretend to be a full-time resident in their second home. Others are trying to move their kids who go to NYU into their Pietater, and establish full-time residents there. So far, a lot of these lawyers and financial advisors are kind of in the position of putting it lightly to their clients. Most of these strategies are not going to get them off the hook. So it sounds like lawyers are advising that not all of these approaches will work,

but they also sound kind of expensive. I mean, would it even be worth it financially? It's really a case-by-case basis for a lot of these owners. I mean, you'll see some owners who, you know, they just want to sell the property. You know, the tax is not worth it to them. But some people are thinking maybe they'll move to New York City full-time instead because the cost of New York City and state income taxes actually is lower than what they would be charged on the Pietater. This tax is just one.

part of New York City mayors over on Mamdani's effort to tax more of wealthy New Yorkers, but it's also one of a number of efforts from around the country to tax wealthiest residents of certain places. What does this rollout of the Pietitare tax show how those other efforts might go over? The general common thread among all of these is that the first knee-jerk reaction you're going to get from the people who could potentially be taxed is we're leaving the city or we're getting out. I think in the rollout of all of these taxes, you'll always hear opposition from kind of the wealthier people who are subject to these tax ideas. That was WSJ reporter Rebecca Pichodo. Thanks, Rebecca.

Thanks for having me. In corporate news, the Federal Aviation Administration has ordered the inspection of Boeing 737 Max jets after the agency found cracks in the body of several models around one of the plane's doors. The agency's directive applies to 471 jets in the U.S. and isn't an urgent safety issue. Boeing said that the directive provides opportunities to detect and correct possible cracks before they exceed a critical length. We're exclusively reporting that Ford has told car dealers that it's planning to produce a four-door gas-powered version of the Mustang for the first time. A Ford spokesman said that the company doesn't comment on future products. And whatnot, the fast-growing live shopping app we told you about earlier,

this week is now valued at $20 billion after a new round of funding. That's nearly double the valuation it hit in October. And that's What's News for this week. Tomorrow you can look out for our weekly markets wrap up, What's News and Markets. Then on Sunday we'll be kicking off a series about how AI tools are coming for mental health. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Anthony Bansy, and our supervising producer was Yolanda McBride. Michael LaValle wrote our theme music. Al-Muslim is our development producer. Chris Zinsley is our deputy editor.

And I'm Alex Osala. Have a great weekend and thanks for listening.