The economy shed 23,000 jobs last month, the Labor Department said Friday, though the unemployment rate slid to 4.1%.
Economists surveyed by Bloomberg had expected a gain of 80,000 positions, an improvement from June’s revised gain of 20,000 jobs.
Private data released this week on the health of the labor market had already been largely benign. Job openings slowed a touch in June, with little movement in quits, layoffs, and hiring rates. Private-sector hiring data from ADP, meanwhile, showed growth fell short of economists’ predictions last month, but pay for job-switchers improved — a small bright spot. And the global outplacement firm Challenger, Gray & Christmas reported that layoff plans declined last month, while hiring plans increased.
An analysis from the Bank of America Institute published Wednesday also noted that payroll growth appeared to accelerate in July, based on deposit account data. Job gains were led by lower-income households, while their annual after-tax wage growth surpassed that of higher-income households for the first time since December 2024.
“What’s driving the pick-up in after-tax wage growth among lower-income households? Alongside strong job growth, we have also observed a rise in job-to-job movements disproportionately boosting lower-income pay growth,” the analysis said.
Tax withholding changes from the One Big Beautiful Bill or cost-of-living pressures could likewise be playing a role. As of June, more Americans were also taking on gig work, with “a broad-based increase in the share of customers already employed and receiving gig income.”
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
Sign up for the Mind Your Money newsletter
Read the latest financial and business news from Yahoo Finance