By Tom LoBianco | Quincy News Correspondent
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Washington (Quincy News) — The U.S. economy lost 23,000 jobs in July, while payroll gains for the prior two months were revised down by a combined 103,000, pointing to a weaker labor market than earlier estimates suggested.
Unemployment dropped to 4.1% in July, even as labor force participation declined, meaning fewer people were counted as actively looking for work, according to the latest numbers on nonfarm employment from the Bureau of Labor Statistics (BLS).
The White House said Friday that temporary factors contributed to the weaker-than-expected July numbers. National Economic Council Director Kevin Hassett pointed to government layoffs and a pileup of snow day makeups at the end of the school calendar, which delayed teacher hiring.
“The momentum in the economy continues to be strong, we see durable goods orders, capital spending through the roof, people aren’t being laid off,” Hassett said. “So when you see a number like that it seems like it’s dissonant with what we’re seeing.”
But some economists said the numbers largely pointed to persistent structural problems in the U.S. economy.
“The July jobs report was uniformly worrisome,” said Michael Hicks, director of the Center for Business and Economic Research at Ball State University. “Losses were broad based. Wage growth was again below inflation for the month, so the average worker in the U.S. saw their purchasing power decline again in July,” Hicks told Quincy News.
The jump in people leaving the workforce altogether, beyond expected baby boomer retirements, may reflect broader weakness in what many economists have described as a “no-hire” economy.
“This worries me… Over 2.1 million people have left the U.S. labor force since November,” wrote Heather Long, chief economist for Navy Federal Credit Union, on X.com. “Some of this is due to lower immigration. Some due to Baby Boomers retiring, but it also likely signals job seekers becoming discouraged.”
July’s numbers were driven largely by declines in hospitality and tourism, which typically add jobs during the summer vacation season. The report also showed the usual seasonal drop in local government education jobs and slower growth in healthcare, one of the economy’s strongest job-producing sectors.
Although monthly jobs figures are typically revised, employer unease over tariffs and persistent inflation has become a consistent pattern, said David Mitchell, director of the Bureau of Economic Research at Missouri State University.
“All that uncertainty stacks up over time,” Mitchell told Quincy News.
Compared with the strong job growth initially reported by the BLS for May, the swings from each new report can seem a bit jarring. Mitchell said the volatility reflects broader challenges in surveying businesses and households, with statisticians working to develop more reliable methodologies, not unlike the struggles among political pollsters to hit the mark in recent years.
Changes in technology and declining response rates from businesses and consumers have made it harder to get a consistent gauge of jobs and consumer sentiment, resulting in larger month-to-month swings in surveys from the BLS to the University of Michigan’s consumer sentiment survey, Mitchell said.
If there was a silver lining in the July jobs report, Hicks said, it’s that a weaker labor market could reduce pressure on the Federal Reserve to raise interest rates. But that outlook could shift quickly depending on next month’s inflation data ahead of the Fed’s next meeting, he added.
The next BLS employment report is scheduled for release on Sept. 4, 2026.
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Image courtesy of the US Wildfire Services Idaho Great-Basin
Image courtesy of the US Wildfire Services Idaho Great-Basin
