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The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment declined by 23,000 in July after a revised gain of just 20,000 jobs the month before. This outcome fell well short of consensus forecasts for an increase of roughly 80,000 positions. Employment dropped in local government education and retail trade even as health care continued to add workers, according to the bureau’s establishment survey. The report also incorporated downward revisions to prior months that lowered combined gains for May and June by 103,000 positions.
According to the Bureau of Labor Statistics, the unemployment rate moved down to 4.1 percent in July from 4.2 percent in June while the labor force participation rate declined to 61.4 percent, the lowest level in more than five years. The number of people on temporary layoff rose by 153,000 to 921,000 during the month. Long-term unemployment, lasting 27 weeks or more, edged down to 1.8 million and accounted for 25.5 percent of the total unemployed.
Average hourly earnings for private-sector workers increased by two cents to $37.62 in July and rose 3.2 percent over the past year, BLS figures show. The average workweek held steady at 34.3 hours for all employees. These compensation measures arrived alongside a labor market that the two surveys indicated had changed little overall.
The July release marked the first monthly decline in nonfarm payrolls since February 2026, when employment fell by 92,000, according to historical BLS records. Revisions to earlier data are routine as the bureau incorporates additional information from businesses and governments. Such adjustments can shift perceptions of employment momentum in the preceding quarters.
The Bureau of Labor Statistics draws its payroll figures from the establishment survey while the unemployment rate comes from a separate household survey of individuals. Both surveys pointed to limited movement in July after stronger gains recorded in earlier periods. The agency noted that jobless individuals unemployed for less than five weeks fell by 344,000 over the year to 2.0 million.
This employment situation report for July was released on a Friday in line with the Bureau of Labor Statistics long-standing schedule for the first week of each month. The data arrives as financial markets and policymakers review a range of economic indicators. Separate tracking by the agency placed average hourly earnings growth within the context of annual trends that have moderated from peaks seen in prior years.
