US Job Growth Slows in July as Unemployment Rises to 4.2%
The U.S. labor market stumbled again in July, with nonfarm payrolls rising by just 73,000 and the unemployment rate edging up to 4.2%.
The figure missed expectations of 100,000 and added to concerns that hiring momentum is weakening.
Adding to the disappointment, prior months were revised sharply lower. June’s total was cut to 14,000 from 147,000, while May fell to just 19,000, slashing a combined 258,000 jobs from earlier estimates. The downward revisions, paired with July’s soft gain, signal that the job market may be losing steam faster than thought.
The weak data rattled markets, with stock futures sliding and Treasury yields dropping. Some analysts believe the grim numbers could strengthen the case for a Federal Reserve rate cut in September, particularly as inflation remains elevated but job growth falters.
Health care once again carried the bulk of hiring, adding 55,000 positions, while social assistance contributed 18,000. Government employment, however, continued its decline, shedding 12,000 jobs in July and bringing total losses since January to 84,000 following staffing cuts under Elon Musk’s Department of Government Efficiency initiative.
On pay, average hourly earnings rose 0.3% in the month and 3.9% from a year ago, slightly hotter than forecasts. While wage growth offers some support for households, economists warn that slowing payrolls combined with higher unemployment could complicate the economic outlook heading into the fall.
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