U.S. Employers Cut 23,000 Jobs in July, Complicating Fed Outlook
Cue Writer
U.S. employers cut 23,000 jobs in July, an unexpected decline that added fresh signs of strain in the labor market and could complicate the Federal Reserve’s next interest-rate decision.
The Labor Department also revised payroll figures for May and June lower by a combined 103,000 jobs, according to the Associated Press. Forecasters had expected job growth to be near 100,000 for July.
The unemployment rate slipped to 4.1%, but AP reported that the decline reflected people leaving the labor force rather than stronger hiring. About 264,000 people exited the labor market during the month, pushing participation to 61.4%, its lowest level since February 2021.
Public-school payrolls fell by 50,000 in July, while restaurants and bars lost 26,000 jobs and retailers lost 19,000. Construction and factory employment rose, the report said.
The data arrive as Federal Reserve policymakers weigh inflation that remains above their 2% target against risks to employment. The Fed held rates steady at its latest meeting, though three officials dissented in favor of a rate increase. A weaker jobs picture could make that debate more difficult.
For households and businesses in the U.S. Virgin Islands, the report matters because U.S. interest-rate decisions influence borrowing costs, consumer spending and broader tourism and investment conditions. The July figures offer a reminder that a lower unemployment rate does not always signal a stronger labor market.
Source: Associated Press