The U.S. economy added just 73,000 jobs in July, well below expectations of 100,000, according to data released Friday by the Labor Department. The unemployment rate ticked up to 4.2% from 4.1%, a modest shift that has added more fuel to a growing debate among economists: is the U.S. economy bending or still quietly holding firm?This jobs report lands at a time when two conflicting narratives are battling for dominance. One side argues the economy remains resilient. Inflation has yet to show any dangerous acceleration despite persistent tariff threats. Consumers appear slightly more confident than earlier this year, and many macro indicators have been remarkably stable since late 2024.The other side sees early signs of strain—ones that could worsen. Companies like Procter & Gamble (NYSE:PG) and Chipotle (NYSE:CMG) have warned that price-sensitive consumers, especially younger ones, are tightening spending. Growth is increasingly concentrated among higher-income households. And while the labor market hasn’t buckled, the pace of job creation has clearly slowed.Jonathan Pingle, chief U.S. economist at UBS, summed it up well: “Everyone is trying to understand what direction the economy is taking.” That uncertainty is now defining the economic narrative.Underlying this confusion is a dramatic shift in labor supply dynamics. Border enforcement has increased significantly, curbing immigration flows that had been a key driver of labor force growth. Simultaneously, the U.S. population is aging. Retirements are rising while fewer young workers are entering the market. High-profile immigration raids and policy restrictions are discouraging participation from undocumented workers and certain migrant groups.Jed Kolko, senior fellow at the Peterson Institute for International Economics, notes that the number of new jobs needed each month to keep the labor market steady has fallen—from 166,000 to just 86,000 over the past 18 months. In that context, a 73,000 print isn’t catastrophic. But it’s also not reassuring.Guy Berger from the Burning Glass Institute cautions against panic. “Almost every major indicator has been pretty steady since last fall,” he said. But he also warns: “I would not bet a lot of money on things staying stable going forward.” Tariffs, immigration shifts, and fiscal uncertainty continue to distort the broader outlook.This leaves policymakers, analysts, and investors in a state of limbo. A weak jobs number doesn’t mean the labor market is deteriorating—it may simply be adapting to a new demographic and policy reality. Berger put it plainly: “People are going to have to get used to employment gains that are meh… That is a weird thing for people to get used to.”July’s jobs report didn’t provide clarity—it exposed how much the metrics we rely on are in flux. The economy may not be weakening, but it is transforming. Slower job growth no longer automatically signals distress. As immigration ebbs, the population ages, and policy uncertainty lingers, interpreting these monthly snapshots requires a more nuanced lens. For now, “meh” might just be the new normal.