The U.S. economy experienced a dramatic reversal in July, unexpectedly losing 23,000 jobs, although the national unemployment rate edged down slightly to 4.1%.
The latest report from the Bureau of Labor Statistics released Friday revealed that nonfarm payroll shrank, even as most economists expected to see steady hiring growth in the 80,000-90,000 range.
This surprise contraction makes it less likely that the Federal Reserve will increase the federal funds rate in the near term. Under its dual mandate to promote maximum employment and stable prices, the central bank typically raises rates to curb inflation and lowers them to stimulate hiring.
Economy saw the steepest declines in employment in local government education (-50,000) and retail trade (-19,000), which led the downward trend in July.
Meanwhile, the health care sector continued expanding, but at a slower pace than before, adding 22,000 payrolls last month.
Additionally, May and June were revised down by a combined 103,000 jobs. May was revised from 129,000 to 63,000 payrolls, while June was revised down from 57,000 to 20,000 jobs.
This is a developing story. Please check back for updates.
Snejana Farberov is a reporter at Realtor.com covering the U.S. housing market and the latest domestic real estate trends. She has worked as a general assignment journalist in New York City and Long Island for 16 years, writing for New York Post, Daily Mail, and News 12. Snejana earned bachelor’s degrees in journalism and Italian from St. John’s University, followed by a master’s degree from Columbia University School of Journalism.
