US Economy Loses Jobs in July Amid Ongoing Inflation Concerns
The US economy has shown signs of weakness in July, losing 23,000 jobs according to the federal government's monthly jobs report. This decline marks a departure from the resilient performance seen so far in 2026, despite a historic oil shock that has driven up fuel prices and increased supply-chain costs.
The unemployment rate fell slightly from 4.2% in June to 4.1% in July, but remains low by historical standards. The US added an average of 92,000 jobs per month over the first half of 2026, a significant improvement from the second half of 2025.
The Iran war has driven up gasoline prices and catapulted inflation to a three-year high in May. A preliminary peace agreement in June offered some relief, but recent on-again, off-again fighting has caused crude prices to rise again.
The combination of elevated inflation and a resilient labor market has raised the chances of an interest rate hike, with investors pegging the odds at 56% according to the CME Group's FedWatch Tool. The Federal Reserve opted to hold interest rates steady last week, but central bankers appeared divided over the move.