U.S. job market loses 23,000 positions in July, unemployment steadies at 4.1%

The Labor Department said the U.S. economy shed 23,000 jobs in July, while the unemployment rate slipped slightly to 4.1%. Economists had expected a gain of 83,000 jobs, far above the actual decline and above June’s increase of 57,000. The bureau also revised its May and June figures downward, cutting 66,000 jobs from May’s total and 37,000 from June’s.

Average hourly earnings rose 0.1% from June and 3.2% from a year earlier, below the 3.5% inflation rate reported most recently. The labor force participation rate fell to its lowest level since February 2021, indicating fewer workers are actively seeking employment.

Employment fell most sharply in local government education, which lost about 50,000 jobs, likely reflecting seasonal school closures. Retail lost 19,000 positions and the financial sector shed 14,000. Health care added 22,000 jobs, though the pace was slower than the average monthly gain over the prior year.

"The labor market is stalling again," wrote Heather Long, chief economist at Navy Federal Credit Union, describing the report as bleak.

Investors reacted to the data with higher stock futures and lower bond yields; S&P 500 futures rose 0.5%, Nasdaq 100 futures 1%, and the 10-year Treasury yield fell to 4.6%.