U.S. employers unexpectedly shed jobs as unemployment rate falls

US employers unexpectedly shed jobs in July, with nonfarm payrolls decreasing by 23,000. This was a surprise, as economists had forecast a gain of 80,000 jobs. The unemployment rate fell to 4.1% from 4.2%, but this was largely due to 264,000 people leaving the labour force, which pushed the participation rate to a near 5½-year low of 61.4%, according to the Straits Times Business.

The July job loss followed revised lower hiring in the prior two months. May's job gains were revised down to 63,000 from 129,000, and June's gain was revised down to 20,000 from 57,000. The economy added 103,000 fewer jobs in May and June than previously thought. Average hourly earnings also missed forecasts, rising just 0.1% in July.

The labour market weakness may give the Federal Reserve room to hold interest rates in place, despite high inflation. The unexpected job loss and downward revisions to prior months' hiring have raised questions about the strength of the labour market.

Brief written by urgent.news from Financial Post, Straits Times Business, Bloomberg, CoinDesk — 4 reports on this story. Machine-written — may contain errors; check the original before relying on it.