It’s a jobs shock: Economy loses 23,000 jobs in July
Employers cut 23,000 positions on a seasonally adjusted basis last month, the Labor Department reported on Friday. The unemployment rate dropped slightly to 4. 1% The underlying details were worse t…
Employers cut 23,000 positions on a seasonally adjusted basis last month, the Labor Department reported on Friday. The unemployment rate dropped slightly to 4. 1%The underlying details were worse than the headlines suggest. Job gains for April and May were revised down by 103,000, bringing the monthly average for 2026 to 60,000. Hourly earnings grew 3. 2% year over the year, the slowest pace since May 2021 and likely less than the rise in prices over the same period. July’s Consumer Price Index reading will be released on August 12. The drop in the unemployment rate resulted from a contraction in the number of people looking for work. The labor force participation rate for people between ages 25 and 54, recovered only slightly from a large drop in June. For all ages, the participation rate sank to its lowest level outside the pandemic recession since 1976, when women were just starting to work in large numbers. The cause of the declining size of the work force is the White House’s ongoing campaign to expel immigrants, who tend to hold jobs at higher rates than native-born Americans. The hiring slump is especially pronounced in the collection of occupations that make up the technology sector, which have shrunk 3. 8% since peaking in 2022, according to an analysis by the employer review website Glassdoor. The weakest spots in the report came from leisure and hospitality, which has shed 80,000 jobs over the past two months despite excitement around the World Cup boosting labor markets in host cities. The construction industry, added 22,000 jobs. Nearly all of them are on commercial projects such as AI data centers. Home building, in contrast, remains pressured by high interest rates. The other remaining source of new employment is health care, which has powered nearly all of the growth over the past few years. The sector added 22,000 positions in July, a markedly slower rate than the prior 12 months. Hiring in temporary help services has also been steadily rising after a long downward slide that reversed course over the winter. The weak jobs report lowered investors’ expectations for an interest rate increase next month to about 40% from more than 50% before the release, according to the pricing of futures contracts. According to the CME FedWatch tool today, August 7, the odds of at least one interest rate hike by the Fed’s December 9 meeting were 78. 6%