US Job Growth Reverses, Mortgage Rates Climb in Weekly Economic Snapshot

The latest round of economic data presents a mixed picture for American households, with the job market showing unexpected weakness and borrowing costs continuing to rise.

Labor Market Reverses

In a sharp reversal, U.S. employers cut 23,000 jobs last month, a significant miss against forecasts that had predicted the creation of nearly 100,000 positions. The Labor Department also revised its estimates for May and June, shaving a combined 103,000 jobs from those months' totals.

The unemployment rate did dip to 4.1%, its lowest level since June 2025. However, this decline was attributed to a shrinking labor force rather than robust hiring, as 264,000 people stopped looking for work. The labor force participation rate fell to 61.4%, the lowest figure since February 2021.

Job losses were concentrated in specific sectors, with local public schools cutting 50,000 positions, restaurants and bars shedding 26,000, and retailers trimming 19,000 jobs.

Housing Costs Rise

Prospective homebuyers faced further strain as the average long-term mortgage rate rose for a fifth consecutive week. The benchmark 30-year fixed-rate mortgage climbed to 6.69%, its highest level in over a year. This increase adds hundreds of dollars to monthly payments, limiting purchasing power and contributing to sluggish home sales.

Meanwhile, the 15-year fixed-rate mortgage, often used for refinancing, saw a slight dip to 6.01%.

Market and Claims Data

Weekly unemployment claims rose by 1,000 to 199,000, a figure that remains within a historically healthy range. Job openings also saw a slight decline in June, falling to 7.36 million, though the labor market showed resilience in sectors like warehousing and transportation.

Wall Street reacted positively to the weaker jobs report, with major indices edging higher on Friday. Treasury yields fell, as the data was interpreted as giving the Federal Reserve more leeway before raising interest rates to combat inflation.