The United States lost 23,000 jobs in July, the worst figure for that month since 2010

The United States destroyed 23,000 jobs during July, according to data released this Friday by the Bureau of Labor Statistics (BLS). This is the worst July for employment since 2010, according to official data. The figure sets off alarms about the real health of the economy because forecasts predicted the creation of 80,000 jobs in the month.

The figure tarnishes the situation of the labor market, which this year has been offering disturbing fluctuations. The monthly average of job creation so far this year is a growth of 34,000 jobs, the lowest since the pandemic.

The end of many temporary contracts after the end of the World Cup held this summer in the United States is one of the explanations for job destruction, although the weakening recorded by the US labor market is deeper than that: tariffs, migration policy, uncertainty over the war in Iran, and the irruption of AI explain the cooling in job creation.

Concerns are growing because the review of the data from the last two months carried out by default by the labor office subtracts 100,000 jobs from the estimated job creation in May and June. "Employment decreased in local government, education, and retail trade. Employment continued its upward trend in the health sector," highlights the federal statistical office.

Employment in the educational sector of city councils destroyed 50,000 jobs in July. The sector related to retail and warehouse, logistics centers, and other retail merchandise deposits lost a total of 40,000 jobs. Jobs at service stations and fuel distributors were reduced by 5,000, coinciding with an unusual increase in fuel prices due to the war against Iran.

The data will serve the Federal Reserve to add arguments against a rise in interest rates. Although inflation has been above the 2% target for more than five years - the latest data shows a price increase of 3.5% - the weakness of the labor market will serve as an excuse for the new governor to avoid rate hikes that disappoint US President Donald Trump, a fervent defender of rate cuts.

"It's hard to qualify this report as anything other than weak," say Bloomberg analysts. The data also surprises because Fed Governor Kevin Warsh showed optimism with the performance of the labor market just a couple of weeks ago: "The economy is showing impressive resilience. Even in the face of recent disruptions, the trends are positive and reflect solid growth. Job creation has continued to keep pace with the growth of the labor force, and the unemployment rate has varied very little."

The data confirm the gradual loss of purchasing power of families over the last year, due to the resurgence of inflation due to Trump's tariffs and the consequences of the war against Iran in the energy market. The average hourly wage increased by 3.2% over the last year, below inflation (3.5%). The unemployment rate drops by one tenth to 4.1%, which is explained to a greater extent by the reduction of the labor force. The labor force participation rate is now at its lowest level since February 2021.