July jobs report: US economy lost 23,000 roles, far short of expectations
The economy shed 23,000 jobs last month, the Labor Department said Friday, though the unemployment rate slid to 4.1%.
Economists surveyed by Bloomberg had expected a gain of 80,000 positions, an improvement from June’s revised addition of 20,000 jobs. Those predictions were dashed as leisure and hospitality dropped 40,000 roles as the World Cup wound down, and local government positions fell by 57,000. Retailers also axed jobs.
May’s payroll growth, which had massively surpassed expectations when it was first released, was revised sharply lower to show a gain of 63,000 roles, rather than 129,000.
“A fairly mediocre report overall,” Homebase chief economist Guy Berger summed it up on X.
Meanwhile, the labor force participation rate, or the share of the population who are working or have actively sought employment, continued to inch down, hitting 61.4% in July, which likely helped pull the jobless rate down.
“Unemployment rate: 4.1% ->This went down for the WRONG reasons,” Heather Long, chief economist at the Navy Federal Credit Union, posted on X. “Over 260,000 left the labor force.”
Also worrying for workers: Average hourly earnings in July increased just 3.2% year over year, likely not keeping pace with price growth.
Overall, the labor market is in a strange spot. Several sectors continued to grow last month, including healthcare and construction. The share of unemployed workers who have been out of work for at least 27 weeks — while still uncomfortably high at 25.5% — fell from June’s level. The Labor Department said the number of workers who remained part-time for economic reasons changed little.
“What’s becoming clear is that demand isn’t disappearing; it’s being redirected,” Ger Doyle, regional president, North America at ManpowerGroup, said in a statement. “We’re entering a labor market where opportunity is increasingly concentrated around specific skills, industries, and investments. Where demand exists is becoming just as important as how much demand exists.”
Private data released this week had been largely benign. Job openings slowed a touch in June, with little movement in quits, layoffs, and hiring rates. Private-sector hiring data from ADP, meanwhile, showed growth fell short of economists’ predictions last month, but pay for job-switchers improved — a small bright spot. And the global outplacement firm Challenger, Gray & Christmas reported that layoff plans declined last month, while hiring plans increased.
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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