US Labor Market Softens, Construction Sector Shows Mixed Results

The US labor market softened in July, as nonfarm payrolls declined by 23,000. This follows downward revisions that subtracted another 103,000 jobs from May and June.

The unemployment rate edged lower to 4.1%, but this was driven by a smaller labor force rather than stronger hiring. The participation rate fell to its lowest level since early 2021, at 61.4%.

The construction sector saw employment rise by 22,000 jobs in July, with residential construction adding approximately 20,000 jobs. However, the six-month moving average of job gains for residential construction remains negative, reflecting an average monthly loss of about 5,350 jobs.