July jobs report reveals unexpected loss of 23,000 jobs, missing economists' forecasts
The U.S. economy unexpectedly shed 23,000 jobs in July, undershooting economists' expectations and signaling the job market may be slowing.
By the numbers
Economists polled by FactSet forecast employers added 95,000 jobs in July.
The unemployment rate in July stood at 4.1%, down from 4.2% in June. The decline largely reflects slower labor force growth, with fewer people entering or remaining in the workforce.
"The rate dropped to 4.1% in large part because labor force growth has stalled, not because opportunity is expanding," Angela Hanks, chief of policy programs at the Century Foundation, a nonpartisan think tank.
The Labor Department also revised down the May and June jobs numbers by a combined 103,000, a sign hiring was weaker than previously reported.
"Hiring has gone into reverse — the economy actually shed jobs last month — and it turns out many of the jobs we thought were there in previous months never really existed," Nic Puckrin, markets expert and former Goldman Sachs analyst, said in an email.
The labor force participation rate — the percentage of the population that is either working or actively looking for work — also fell again, reaching 61.4% in July, the lowest level since February 2021.
Losses across local government education and retail dragged down last month's employment data, with the sectors losing 50,000 and 19,000 jobs, respectively. Healthcare, which has been the main driver this year for payroll gains in the U.S. economy, added 22,000 jobs.
What the experts say
Hiring remains generally more muted than in the post-pandemic years, when the U.S. economy experienced an employment rebound. Kory Kantenga, the head of economics, Americas, at LinkedIn, described the job market as "slow," especially for young people.
"There's not a lot of action. Unemployment is holding steady, but we haven't seen hiring pick up meaningfully in years," he told CBS News before the release of Friday's jobs report.
July data from LinkedIn shows hiring and job postings remained essentially unchanged from June. At the same time, job-seeking intensity — measured by applications per applicant — increased, suggesting competition is increasing for a limited number of roles.
While hiring remains stagnant, layoffs recently hit their lowest level in two years, recent data shows, reinforcing the "low fire, low hire" label economists have used to characterize the labor market.
Separate data released Thursday shows weekly unemployment claims remain historically low. The four-week average of initial jobless claims dipped below 200,000 for the week ending Aug. 1, marking the first time it has fallen below that threshold since October 2022, according to PNC Economics.
"Although the hiring rate is low, the unemployment rate remains steady because layoffs are also low," Fed Governor Lisa Cook said during an event at the Anchorage Economic Development Corporation on Wednesday.
