US Employers Unexpectedly Cut Jobs in July Amid Labor Market Uncertainty

U.S. employers unexpectedly shed jobs in July, with a net decrease of 23,000 nonfarm payrolls, according to data released by the Bureau of Labor Statistics.

The decline was driven by cuts in government, leisure and hospitality, and retail trade sectors, while 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 labor force participation continued to slide, with the participation rate falling to 61.4% - its lowest level since the 1970s, excluding the pandemic.

Average hourly earnings rose 3.2% from a year earlier, marking the slowest pace in more than five years, while wage growth slowed down due to rising prices and uncertainty from the Iran war.