US employers unexpectedly shed jobs, unemployment rate falls

In July, US employers unexpectedly shed jobs, with nonfarm payrolls decreasing by 23,000 following a 103,000 downward revision to May and June figures, according to the Bureau of Labor Statistics. The unemployment rate fell to 4.1%, while labor force participation continued to decline and wage growth slowed. The labor market, which had shown strength earlier in the year, appears weaker than previously thought, possibly due to rising prices and uncertainty stemming from the Iran war.

The report may prompt the Federal Reserve to delay interest-rate increases as officials balance inflation concerns with employment risks. Experts suggest the decline was driven by cuts in government, leisure and hospitality, and retail trade, with private-sector payrolls up by 30,000 for a second month. Local government employment dropped significantly, and leisure and hospitality employment reached the lowest level in nearly a year.

Payrolls in the financial activities sector, a key employer of white-collar workers, fell to the lowest level in four years. Despite the decline, many economists believe the data could still influence the Federal Reserve's interest-rate decisions.