US economy unexpectedly loses 23K jobs amid Iran war
(NewsNation) — The U.S. economy saw an unexpected decline in jobs during July while the unemployment rate edged lower, according to the Bureau of Labor Statistics.
The U.S. has lost 3,000 jobs since the start of June, the new data shows. July saw 23,000 jobs lost, and revisions slashed previously reported gains.
The June jobs numbers from the Labor Department Friday marked a sharp reversal for the labor market.
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The U.S. labor market has remained resilient despite the war in Iran, and economists expect that trend to continue with Friday’s jobs report.
Hiring is expected to remain steady, though modest, with the unemployment rate holding unchanged. Even as the conflict has pushed gas prices higher and added economic uncertainty, layoffs have stayed fairly low. Unemployment claims have also dropped after surging in June.
Still, economists are divided on whether that strength will last.
The closely watched mid-year jobs report is expected to show employers added about 80,000 jobs. Labor economists say the economy entered the spring with solid momentum, with three consecutive months of stronger-than-expected job gains.
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Unemployment is forecast to remain at about 4.2%
“The bigger challenge that we’re seeing right now is that there are a lot of people exiting the labor force entirely. So, while we’re seeing slow job growth, we’re not really seeing a big uptick in unemployment, and that’s because we have fewer people available to work,” said Nicole Bachaud, a labor economist with ZipRecruiter. “That’s really where some of the stickiness and the tightness in the labor market is going to come from in the coming months as we see hiring and job growth start to normalize again.”
The Federal Reserve is also expected to watch the report closely as it considers its next move on interest rates. Wage growth and labor force participation will be among the key indicators policymakers and economists will be monitoring.
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