US Employers Cut Jobs Amid Rising Prices and Labor Market Uncertainty
US employers unexpectedly cut jobs in July, with nonfarm payrolls decreasing by 23,000. This decline was driven by cuts in government, leisure and hospitality, and retail trade sectors. Private-sector payrolls rose by 30,000 for a second month, led by healthcare and social assistance.
The unemployment rate fell to 4.1%, but the labor force participation continued to slide, reaching its lowest level since the 1970s at 61.4%. Average hourly earnings rose 3.2% from a year earlier, marking the slowest pace in more than five years.
The data suggests that the labor market may be weakening amid rising prices and uncertainty from the Iran war. This could prompt the Federal Reserve to delay interest-rate increases as officials weigh inflation against risks to employment.