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US labor market weakens as July job losses surprise forecasts

July employment fell by 23,000, while prior months were revised down a combined 103,000 jobs, even as the unemployment rate stayed at 4.1%.

Reported · Written up by our desk · Economy

The US economy showed a clear cooling signal in July as employers cut 23,000 jobs, surprising economists who expected no change in the unemployment rate and 83,000 new jobs, according to data reported by the Bureau of Labor Statistics.

The unemployment rate held steady at 4.1%, but revisions to earlier months were sharply lower. Figures for May were revised down to 63,000 jobs added from an initially reported 129,000, and June was revised down to 20,000 jobs added from an initial estimate that had been stronger, leaving May and June combined revised down by 103,000 jobs.

Job losses in July were concentrated in local government education, which shed 50,000 jobs, and retail, down 19,000. The private sector still added 30,000 jobs, with growth focused again in healthcare.

Incomes also showed limited movement, with hourly earnings for all employees changing little over the past year, rising 3.2%. The article points to next week’s consumer pricing data as a key check on whether wage gains are keeping up with inflation, against a backdrop of pressure for the Federal Reserve to raise interest rates.

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