US Labor Market Unexpectedly Weakens in July

The US labor market unexpectedly weakened in July, as employers cut jobs and revised payroll figures for the previous two months sharply lower.

The Labor Department reported a decline of 23,000 nonfarm payrolls last month, the first drop in five months. Economists surveyed by Reuters had expected an increase of 80,000 jobs after June's previously reported gain of 57,000.

The government also revised May and June payrolls down by a combined 103,000 jobs, further softening the recent employment picture.

Despite the payroll decline, the unemployment rate edged down to 4.1% from 4.2% in June due to 264,000 people leaving the labor force, pushing the labor force participation rate down to 61.4%, its lowest level since February 2021.