Trending
WASHINGTON -- The U.S. job market stalled unexpectedly last month, delivering a political blow to President Donald Trump three months ahead of midterm elections and complicating decision-making for the inflation fighters at the Federal Reserve.
Employers cut 23,000 jobs in July. And Labor Department revisions slashed 103,000 jobs from May and June payrolls.
The unemployment rate fell but for the wrong reason: Thousands of people dropped out of the labor market so fewer people were competing for work.
The July jobs numbers from the Labor Department Friday marked a sharp setback for the American labor market and for Trump less than three months before his Republican party seeks to keep full control of Congress in the midterm election.
Forecasters had expected job creation to approach 100,000 last month.
Local public schools cut 50,000 jobs in July, restaurants and bars 26,000, retailers 19,000.
The 4.1% unemployment rate was the lowest since June 2025 -- but it only fell because 264,000 people dropped out of the labor market last month. The share of those working or looking for work fell to 61.4%, the lowest since February 2021.
"We can't really put lipstick on a pig here,'' said Daniel Zhao, chief economist at the jobs website Glassdoor. "This is not a great report for July.''
The Trump administration, which has imposed massive tariffs in an attempt to protect American industry and create manufacturing jobs, noted that jobs were up 22,000 at construction companies and 5,000 at factories.
"The Trump industrial resurgence is on schedule," said White House spokesman Kush Desai. "Manufacturing and factory construction jobs grew again in July even as government payrolls continued to significantly shrink.''