Key facts
- The U.S. economy lost 23,000 jobs in July, missing forecasts of an 80,000 gain.
- Job gains for May and June were revised downward by a combined 103,000.
- The unemployment rate fell to 4.1% in July, with the labor force participation rate declining.
- The softer-than-expected employment data may ease pressure on the Federal Reserve to raise interest rates further.
- Fed funds futures now price in 40% odds of a September rate hike, down from 55% prior to the report.
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. Wage growth also declined to a cycle low of 3.2%.