The United States economy unexpectedly lost 23,000 jobs in July, marking the first monthly decline in employment in months and raising fresh concerns about a slowdown in the labour market.
According to data released on Friday by the US Bureau of Labor Statistics (BLS), nonfarm payrolls fell by 23,000 jobs in July, sharply missing economists’ expectations of an 80,000-job increase. The disappointing report also included significant downward revisions to previous months, reinforcing signs that hiring momentum is weakening.
Despite the decline in employment, the unemployment rate edged down to 4.1% in July from 4.2% in June, reaching its lowest level since June 2025 with Healthcare remaining one of the few sectors adding jobs during the month, while employment declined in education, retail, and financial services.
The July employment report adds to growing evidence that the US labour market is losing momentum after remaining resilient for much of the year. Earlier this week, payroll processor ADP reported that private-sector employment increased by only 44,000 jobs in July, less than half the pace recorded in the previous month.
Economists have increasingly described the current labour market as a “low-hire, low-fire” environment, where businesses are reluctant to hire aggressively but are also avoiding widespread layoffs.
The weaker employment data comes as the Federal Reserve continues to balance slowing economic activity against lingering inflation risks, with policymakers expected to closely monitor upcoming inflation and employment reports before making their next interest rate decision.
