US Labor Market Contracts Unexpectedly in July

The US labor market unexpectedly contracted in July, with nonfarm payrolls posting their first monthly decline since years. According to the Bureau of Labor Statistics, nonfarm payrolls fell by a seasonally adjusted 23,000 in July, following a downwardly revised decline of 20,000 jobs in June.

Economists surveyed by Dow Jones had expected employers to add 83,000 jobs during the month. However, sharp downward revisions to previous data revealed that payroll gains for May and June were lower than initially reported, with a combined 103,000 job losses.

The unemployment rate edged down to 4.1% from 4.2%, largely due to a drop in labor force participation, which slipped to 61.4%, the lowest level in over five years.