July jobs report reveals unexpected loss of 23,000 jobs

The U.S. economy unexpectedly shed 23,000 jobs in July, a stark contrast to economists' forecasts of 95,000 additions and signaling a potential slowdown in the job market. The Labor Department also revised down May and June job numbers by a combined 103,000, indicating weaker hiring than previously reported.

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Hiring has gone into reverse, the economy actually shed jobs last month, and it turns out many of the jobs we thought were there in previous months never really existed.

"Hiring has gone into reverse, the economy actually shed jobs last month, and it turns out many of the jobs we thought were there in previous months never really existed," said Nic Puckrin, a markets expert and former Goldman Sachs analyst. The labor force participation rate, which measures the percentage of the population working or actively seeking work, also declined to 61.4% in July, the lowest level since February 2021.

Job losses were primarily driven by sectors such as local government education, which lost 50,000 jobs, and retail, which shed 19,000 jobs. Healthcare, a consistent driver of payroll gains this year, added 22,000 jobs.

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There's not a lot of action. Unemployment is holding steady, but we haven't seen hiring pick up meaningfully in years.

Experts describe the current job market as "slow," particularly for young people. Hiring has remained muted compared to the post-pandemic rebound years. Data from LinkedIn shows hiring and job postings were largely unchanged from June, while applications per applicant increased, suggesting heightened competition for available roles. Despite stagnant hiring, layoffs have reached a two-year low, contributing to the "low fire, low hire" characterization of the labor market. Weekly unemployment claims also remain historically low, with the four-week average dipping below 200,000 for the first time since October 2022.

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Although the hiring rate is low, the unemployment rate remains steady because layoffs are also low.