The United States lost 23,000 jobs in July, the Bureau of Labor Statistics reported, while the unemployment rate edged down to 4.1 percent from 4.2 percent. The decline in unemployment was partly driven by a fall in labour force participation, which dropped to 61.4 percent.
Some 264,000 people left the labour force, meaning they were no longer working or actively looking for work. The participation rate is the lowest in five years and, excluding the effects of the COVID-19 pandemic, the lowest in five decades.
At a glance:
- Retail trade employment fell by 19,000, including a 21,000-job decline at warehouse clubs and big-box retailers.
- Leisure and hospitality lost 40,000 jobs, including 26,000 in food services.
- Government employment fell by 53,000, with local education accounting for 49,000 of the losses.
- Healthcare added 22,000 jobs, mostly in ambulatory healthcare services.
Government, hospitality and retail recorded sharp losses
Government posted the largest decline, losing 53,000 jobs overall. Local education accounted for 49,000 of those cuts. Retail trade employment fell by 19,000, as warehouse clubs and big-box retailers shed 21,000 jobs and petrol stations cut 5,000.
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The losses were partly offset by specialised goods stores, including music and sporting goods retailers, which added 10,000 jobs. Leisure and hospitality also contracted during the normally busy summer travel season, losing 40,000 jobs, while food services accounted for 26,000 of the decline.
Healthcare gains did not prevent a weaker labour market
Healthcare added 22,000 jobs in July, with ambulatory healthcare services contributing 18,000. The latest report also revised June’s job gain down to 20,000.
The figures come amid a low-hire, low-fire environment. The number of job openings fell from 7.5 million to 7.4 million in May, while hiring was unchanged at 5.3 million, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Summary.
Jobs report shifts rate expectations
The report has increased expectations that the Federal Reserve will leave interest rates unchanged at its next policy meeting in September. CME’s FedWatch tool put the chance of rates remaining unchanged at 56 percent, up from 45 percent the previous day.
The Federal Reserve last month maintained its benchmark interest rate at 3.50 to 3.75 percent. US markets were higher in midday trading: the Nasdaq rose 0.9 percent, the S&P 500 gained 0.5 percent and the Dow Jones Industrial Average advanced 0.3 percent. Gold rose 2.2 percent to $4,336.09 an ounce.
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