US Economy Slows with 23,000 Non-Farm Job Losses

The US economy showed signs of slowing down in July as non-farm payrolls fell by 23,000, missing market expectations for an increase of 88,000. According to the Bureau of Labor Statistics, local government education employment led the decline with a drop of 50,000 jobs. Retail trade and financial activities also shed 19,000 and 14,000 jobs respectively.

Healthcare employment continued to rise with a gain of 22,000 jobs. The unemployment rate dipped to 4.1 percent in July from 4.2 percent in the previous month. However, the number of people on temporary layoff increased by 153,000 to 921,000.

Jeff Schulze, head of economic and market strategy at ClearBridge Investments, noted that the drag from local government education was a typical seasonal pattern at the end of the school year and is usually reversed in the fall. Jeff Rosenberg, a portfolio manager at BlackRock Inc., said that while one data point does not make a trend, some slowing in the labor market deserves attention.

The news led to a decrease in expectations for a Federal Reserve interest rate hike in September, with the yield on the US 10-year Treasury falling about 5 basis points.