US July Jobs Report Shows Cooling Labor Market
US nonfarm payrolls fell by 23,000 in July, while the unemployment rate dipped to 4.1%. Wage growth and labor force participation showed signs of cooling.
The US labor market showed signs of cooling in July, according to the latest data from the Labor Department. Nonfarm payrolls contracted by 23,000 jobs, a sharp reversal from the 20,000 jobs added in June and the 63,000 added in May.
The unemployment rate, however, edged down to 4.1% from 4.2% in June. This improvement was driven by a decline in the civilian labor force, which shrank by 264,000 workers. The number of employed persons also fell by 87,000, while the number of unemployed dropped by 178,000.
The labor force participation rate slipped to 61.4% in July from 61.5% the previous month, indicating that some workers are exiting the job market.
Wage growth remained modest. Average hourly earnings for all private non-farm workers rose by 0.1% month-over-month to $37.62, bringing the year-over-year increase to 3.2%. The average workweek held steady at 34.3 hours.
Sector-wise, the goods-producing industries added 25,000 jobs, led by construction with 22,000 new positions. Manufacturing contributed 5,000 jobs. The service-providing sector added just 5,000 jobs, with retail trade shedding 19,400 positions. Government employment fell sharply by 53,000 jobs.
The broader U-6 jobless rate, which includes marginally attached workers and those employed part-time for economic reasons, remained unchanged at 7.9%. Among demographic groups, the Black unemployment rate improved to 6.3% from 6.6%, while the Hispanic rate fell to 4.6% from 5.2%. The White rate held at 3.6%, and the Asian rate ticked up to 4.0%.
The data comes from two separate surveys: nonfarm payroll figures are based on a survey of employers, while the unemployment rate is derived from a household survey.