Key facts
- The U.S. economy lost 23,000 jobs in July, missing forecasts.
- Economists had predicted an increase of 80,000 jobs.
- Job gains for May and June were revised downward by a combined 103,000.
- Declines in local government education and retail trade roles contributed to the job losses.
- The unemployment rate fell to 4.1% in July.
- Labor force participation rate declined further.
- Stock futures rose, with the Nasdaq composite and S&P 500 on track to add gains.
- U.S. Treasury yields fell, reflecting lower rate-hike expectations.
- The U.S. dollar index slipped alongside rate expectations.
- Fed funds futures now price in 40% odds of a September rate hike, down from 55%.
The U.S. economy unexpectedly shed 23,000 jobs in July, a significant miss from economists' forecasts of an 80,000 gain. This decline, driven by losses in local government education and retail sectors, follows downward revisions to job creation figures for May and June, totaling 103,000. Despite the job losses, the unemployment rate edged down to 4.1% from 4.2% in June, partly attributed to a decrease in labor force participation. The softer-than-expected employment data may ease pressure on the Federal Reserve to raise interest rates further, with Fed funds futures now pricing in 40% odds of a September hike, down from 55% prior to the report. Stock futures rose, Treasury yields fell, and the U.S. dollar index slipped in reaction to the news.