Economists had predicted a significant increase in hiring
U.S. payrolls fell by 23,000 in July, missing economists forecast for an 83,000 gain by 106,000 jobs.
Health care remained a bright spot, adding 22,000 jobs, while local government education, retail and financial activities cut workers.
The unemployment rate slipped to 4.1%, better than the 4.2% economists expected, but participation remained weak and prior payroll figures were revised sharply lower.
U.S. employers unexpectedly cut jobs in July, with losses in education and retail outweighing continued hiring in health care and providing new evidence that the labor market is losing momentum.
Nonfarm payrolls declined by 23,000 last month, the Labor Department reported Friday. It was a big miss because economists surveyed by The Wall Street Journal had expected employers to add 83,000 jobs, making the result a 106,000-job shortfall against the consensus forecast.
The unemployment rate edged down from 4.2% to 4.1%, compared with expectations that it would remain at 4.2%.
The headline decline followed an average monthly gain of just 34,000 during the previous 12 months. Downward revisions deepened the signs of weakness: Mays gain was reduced to 63,000 from 129,000, while Junes was cut to 20,000 from 57,000. Together, the two months produced 103,000 fewer jobs than previously reported.
Local government education led the pullback, shedding 50,000 positions after recording little net change over the preceding year.
Big loss among retailers
Retailers cut 19,000 jobs. Warehouse clubs, supercenters and other general merchandise stores eliminated 21,000 positions, while gasoline stations and fuel dealers lost 5,000. Those declines were partly offset by 10,000 new jobs at sporting-goods, hobby, musical-instrument, book and miscellaneous retailers.
Financial services continued to contract, losing 14,000 jobs in July. Credit intermediation and related businesses cut 9,000 positions, while insurance carriers and related companies shed 7,000. The sector has lost 121,000 jobs since its recent peak in May 2025.
Health care was the principal source of hiring, adding 22,000 jobs. Ambulatory health-care services accounted for 18,000 of that increase. Even there, however, growth moderated: health care had added an average of 36,000 jobs a month over the previous year.
Sectors showing little movement
Hiring was largely stagnant elsewhere. Employment showed little change in construction, manufacturing, mining, wholesale trade, transportation and warehousing, information, professional and business services, social assistance, leisure and hospitality, and other services.
Separate figures from the Labor Departments household survey presented a somewhat steadier picture. The number of unemployed Americans was little changed at 6.9 million, while unemployment declined among teenagers and Hispanic workers. The number of people on temporary layoff, however, rose by 153,000 to 921,000.
Labor-force participation held at 61.4%, but it has fallen by 0.7 percentage point since January. The employment-to-population ratio, unchanged at 58.9% in July, has declined by half a percentage point over the same period. Those decreases suggest the lower unemployment rate partly reflects fewer people participating in the labor market rather than robust hiring.
Wage growth also cooled. Average hourly earnings rose just 2 cents to $37.62, leaving them 3.2% higher than a year earlier. The average private-sector workweek remained unchanged at 34.3 hours.
Photo By CNET
Posted: 2026-08-07 12:56:04
















