A negative payroll number

US nonfarm payroll employment fell by 23,000 in July, while the unemployment rate was little changed at 4.1%, according to the Bureau of Labor Statistics.

The payroll figure was weaker than the recent pace of hiring. The BLS said employment had increased by an average of 34,000 a month over the previous 12 months, making July another sign that job creation has slowed substantially from earlier post-pandemic rates.

Unemployment stays near 4.1%

The household survey counted 6.9 million people as unemployed in July. Labour-force participation was 61.4% and the employment-to-population ratio was 58.9%, both little changed over the month.

Temporary layoffs increased by 153,000 to 921,000, while the number of permanent job losers was little changed at 1.7 million. Long-term unemployment edged down to 1.8 million but still represented about a quarter of all unemployed people.

Where jobs moved

The largest reported decline came in local government education, which lost 50,000 jobs. Retail trade fell by 19,000 and financial activities continued to trend down, losing 14,000 positions.

Health care remained one of the clearer areas of growth, adding 22,000 jobs, although that was below its average monthly increase over the previous year. Most other major industries showed little change.

Earlier gains cut by 103,000

The revisions to previous months were as important as the July headline. May's increase was cut from 129,000 to 63,000, while June's gain was reduced from 57,000 to 20,000.

Together, those changes removed 103,000 jobs from the previously reported May and June total. Monthly revisions are normal because the BLS receives additional employer reports and recalculates seasonal factors, but large downward changes alter the picture policymakers and investors had been using.

The headline loss was small, but the combined downward revision to May and June makes the slowdown harder to dismiss as a one-month fluctuation.

Wages keep rising, but more slowly

Average hourly earnings for private-sector workers were $37.62 in July, up two cents from June and 3.2% from a year earlier. The average workweek remained at 34.3 hours.

The combination leaves the US labour market in an unusual position: unemployment remains low by historical standards, but payroll growth has become weak and previous gains look smaller after revision. The next question is whether July proves to be a temporary dip or the start of a more persistent loss of momentum.