The economy shed 23,000 jobs in July, according to the Bureau of Labor Statistics, well below the 83,000 gain economists had forecast.
Sector gains and losses:
Local government education shed 50,000 jobs; retail trade lost 19,000, with warehouse clubs and general merchandise retailers accounting for most of that decline (-21,000).
Financial activities lost 14,000 jobs and is now down 121,000 since a peak in May 2025.
Health care added 22,000 jobs, continuing its upward trend but below its 12-month average of +36,000 per month.
Employment was little changed in construction, manufacturing, transportation and warehousing, professional and business services, and leisure and hospitality.
Unemployment and labor force participation:
The unemployment rate edged down to 4.1% from 4.2% in June, but the drop reflected fewer people looking for work, not more people finding jobs.
The labor force participation rate held at 61.4%; it has fallen 0.7 percentage points since January.
The number of people on temporary layoff rose by 153,000 to 921,000.
Long-term unemployment (jobless 27 weeks or more) edged down to 1.8 million but still accounts for 25.5% of all unemployed people.
Wages and hours:
Average hourly earnings were little changed at $37.62, up 3.2% year-over-year.
The average workweek held steady at 34.3 hours.
Prior month revisions:
May was revised down 66,000, from +129,000 to +63,000; June was revised down 37,000, from +57,000 to +20,000.
The two months combined are 103,000 lower than previously reported.
The report shows the first job decline since February alongside steep downward revisions to previous months' data — hinting at bigger cracks in the labor market than previously known.”
Read more via Bureau of Labor Statistics, The Wall Street Journal, CBS News, Axios
NOTE: The ADP Employment Report and the Bureau of Labor Statistics Jobs Report utilize different data, and therefore provide differing reports. ADP's report includes only private sector data.
Private sector hiring slowed sharply in July, with employers adding just 44,000 jobs, the weakest monthly gain since January, according to ADP. Economists had expected 75,000. ADP and BLS use different methodologies and may produce differing results.
Goods-producing sectors shed 3,000 jobs; service-providing sectors added 47,000.
Education and health services led with 36,000 new jobs; leisure and hospitality shed 11,000.
The Northeast added 37,000 jobs; the Midwest lost 9,000.
More than half of total job gains came from small firms; large establishments added 13,000.
June payrolls were revised down from 98,000 to 95,000.
Pay growth told a different story. Annual pay growth for job-stayers held at 4.4%, while pay growth for job-changers rose to 7.0%, the largest year-over-year increase since August 2025.
Job-changers are highly sensitive to real-time economic conditions, and their rapid pay growth implies supply constraints in parts of the labor market."
Read more via ADP, The Wall Street Journal
The Job Openings and Labor Turnover Summary is a monthly Bureau of Labor Statistics report that tracks how many jobs are vacant, how many people are hired, and how many workers leave -- voluntarily or otherwise.
JOLTS terminology, explained:
The job openings rate is the percentage of total jobs (filled and unfilled) that are currently vacant.
The hiring rate measures the number of hires made during a specific month as a percentage of total employment.
The quits rate is the monthly number of workers who voluntarily leave their jobs, expressed as a percentage of total employment.
Job openings, hires, quits, and layoffs all held near recent levels in June, according to the Bureau of Labor Statistics.
The total number of job openings was “little changed” at 7.4 million. The job openings rate came in steady at 4.4%.
The number of total hires was 5.3 million in June, while the hiring rate came in at 3.4%, both unchanged.
The quits rate held at 2.0%; layoffs and discharges were unchanged at 1.8 million, a rate of 1.1%.
Openings increased in transportation, warehousing, and utilities (+97,000) and federal government (+39,000); wholesale trade (-74,000) and nondurable goods manufacturing (-55,000) saw declines.
Leisure and Hospitality saw the largest drop in hires between May and June, falling 87,000; year-over-year, hires in the sector dropped 174,000.
May revisions: openings revised down 57,000 to 7.5 million; hires revised up 82,000 to 5.3 million; total separations revised up 159,000 to 5.3 million.
Read more via Bureau of Labor Statistics, Indeed Hiring Lab
The U.S. economy needs to add a certain number of jobs each month just to keep the unemployment rate from rising. Oxford Economics projects that number will fall to zero by 2027 and turn negative by 2028.
The post-pandemic immigration surge pushed the monthly jobs-needed figure to around 200,000; restrictive immigration policies and an aging population have since brought it down to roughly 50,000.
Oxford Economics projects the bulk of baby boomer retirements will occur between 2026 and 2029.
Brookings estimates the U.S. saw negative net immigration in 2025 for the first time in over a decade, with net immigration projected to range between -925,000 and +185,000 in 2026.
Trump's immigration crackdown has not yet tightened labor market conditions, Oxford Economics found, but the effects are expected to be felt most in California, Florida, New Jersey, New York, and Texas.
Persistent healthcare hiring is expected to keep actual job growth slightly positive, applying gentle downward pressure on unemployment over the next few years.
Population aging and the sharp reduction in net immigration will mean that in the next years the labor market won't need to add any jobs and can even lose a modest number of jobs for the unemployment rate to remain stable. This is something we haven't seen before, at least since the 1960s."
Read more via Newsweek
Former Commerce Secretary Gina Raimondo has launched Raise Us, a nonprofit aimed at connecting AI companies, workers, and state governments to get ahead of potential economic disruption from AI. The organization has secured $500 million in commitments from Amazon, Anthropic, Microsoft, and the OpenAI Foundation, among others. Those funders have a financial stake in how AI's workforce impact is framed and addressed.
Raise Us has launched pilot programs in Arkansas, Utah, Connecticut, and Maryland, with state-level experiments expected to eventually shape national policy.
Arkansas is piloting a personalized career learning platform; Maryland is developing new career-transition models.
Raimondo said the government is not yet doing enough to prepare workers: "How do we support workers? How do we retrain workers? How do we incentivize companies not to just lay people off?"
California Gov. Gavin Newsom recently launched a separate tool to track AI-related unemployment trends, though the data show no signs of displacement so far.
Read more via Puck News
The New York Fed and Washington Center for Equitable Growth both took stock this week of what the evidence does and doesn't show about AI's impact on the labor market. The short answer: adoption is rising, but mass displacement hasn't arrived yet.
NY Fed surveys found AI adoption among service firms rose from 25% in 2024 to 40% in 2025, but firms report very few AI-driven layoffs so far.
Firms are more likely to retrain workers than replace them, though they do anticipate reducing hiring plans going forward, especially for college-educated workers.
Some firms are cutting hiring because AI automates tasks; others are adding headcount specifically for AI-proficient workers.
University of Maryland research found that firms investing in AI hire more junior workers while reducing middle-management and senior roles; University of Navarra research found the opposite.
NY Fed Research Director Kartik Athreya noted that workers whose skills become suddenly less valuable face serious risk, and that retraining, safety net expansions, and UBI proposals all carry unintended consequences worth understanding better.
Read more via Federal Reserve Bank of New York, Washington Center for Equitable Growth
Indonesia: Indonesia's national AI strategy is focused on infrastructure and investment, but a new analysis from the Lowy Institute argues the harder challenge is making sure AI doesn't cut off the path to formal employment that women have relied on for a generation. Women hold nearly 60% of service-sector jobs, exactly the clerical and administrative roles most exposed to AI automation. Indonesia's female labor force participation sits at roughly 53%; raising it to 58% would add an estimated $62 billion to the economy per World Bank modeling, but that requires childcare investment, not just AI training programs. (Lowy Institute)
Philippines: AI is putting pressure on the country's $40 billion outsourcing industry, which employs roughly 1.9 million people and accounts for about 10% of the economy. The International Labour Organization estimates that 12.7 million Filipinos, more than one in four workers, are in jobs exposed to generative AI, the highest share in Southeast Asia. More than two-thirds of industry association members are already running AI pilots; the government has committed to upskilling more than 300,000 outsourcing workers but acknowledges the country's economic model may need rethinking. (BBC)
United Kingdom: AI is splitting the labor market into two tracks, according to new data from Indeed. British firms posted about 10% fewer vacancies this month than in January 2025, but the decline masked sharp divergence: software developer postings rose 14%, driven largely by senior and AI-linked roles, while vacancies in accounting, marketing, retail, and manufacturing fell by double digits. Youth unemployment is at its highest in over a decade. (Bloomberg)
