The U.S. economy lost 23,000 nonfarm jobs in July, far below the roughly 80,000 gain analysts had forecast, as the labour participation rate fell to 61.4 percent, its lowest level since February 2021. The unemployment rate edged down to 4.1 percent, from 4.2 percent, driven by the shrinking workforce rather than hiring gains.
Job losses were led by a 50,000 decline in local government education and a 19,000 drop in retail, while healthcare added 22,000 positions — well below its trailing 12-month average. The Labour Department also revised June's figure down to 20,000 from an initially reported 57,000.
Richmond Fed President Thomas Barkin said the labour market appeared to be in a "weak equilibrium," with hiring concentrated largely in healthcare over the past 18 months. The Federal Reserve, which has held its benchmark rate at 3.5–3.75 percent all year under Chairman Kevin Warsh, voted 9–3 last month to keep rates unchanged. U.S. stock futures rose on expectations the data would keep the Fed on hold.