CIBC Research reviews the US labor report for the month of July.

"July US labor market data were on balance a disappointment, notwithstanding an even lower unemployment rate. The downtick to a tight 4.1% jobless rate came despite an 87K drop in household survey employment, as the participation rate continued to decline, having already seen a a notable weakening in the prior month. Payrolls dropped 23K against consensus expectations for an 80K gain, and the miss will look even larger due to a combined 103K downward revision to the prior two months. The results for July looked somewhat better for the private sector, seeing net hiring of 30K," CIBC notes.

"The weakness showed up in government, hospitality and retailing. Hourly earnings gains were light, rising 2 cents on the month. This is still a tight labour market that’s essentially at full employment, but the lacklustre job numbers, and the weakness in labor force participation, are signposts of an underlying fragility that could allow the Fed to continue to sit on the sidelines," CIBC adds.