The economy shed 23,000 jobs in July, yet the unemployment rate magically fell to 4.1 percent — because 264,000 Americans stopped being counted.
The Bureau of Labor Statistics reported Friday that nonfarm payrolls contracted by 23,000, missing the Dow Jones consensus forecast of an 83,000 gain by more than 100,000 jobs. Not a single economist surveyed by Econoday predicted a negative number, according to Breitbart. But the unemployment rate dropped anyway, because the labor force participation rate fell to 61.4 percent — its lowest level in more than five years, per CNBC. Household employment actually fell by 87,000. The unemployment rate declined only because 264,000 people left the labor force entirely. Stop looking for work, and the government stops counting you as unemployed.
The prior months were quietly worse than advertised, too. May was revised down by 66,000 to just 63,000 jobs. June was revised down by 37,000 to a thin 20,000. Combined, the economy had 103,000 fewer jobs than previously reported.
Where did July's losses land? The public sector bled 53,000 jobs, driven by a roughly 50,000 decline in state and local education. Retail trade lost 19,000. Leisure and hospitality shed 40,000 — bars and restaurants alone cut 26,100 — though both outlets note the end of the World Cup may have driven some of that pullback. Financial activities fell 14,000.
The bright spots were narrow. Construction added 22,000. Healthcare, normally the reliably strong jobs engine, added just 22,000 — well below its 12-month average of 36,000. Durable goods manufacturing picked up 18,000, though nondurable manufacturing lost 13,000, leaving a net manufacturing gain of just 5,000.
Wages went nowhere. Average hourly earnings rose just 0.1 percent for the month — half the forecast — and the 12-month gain fell to 3.2 percent, the lowest since May 2021, according to CNBC. The average workweek was flat at 34.3 hours.
CNBC framed the story around what it means for the Federal Reserve: futures rallied and Treasury yields plunged as traders slashed the odds of a September rate hike to 44 percent. Wall Street loved the weak report because it pressures the Fed to back off. Breitbart noted the shift away from an immigration-driven workforce may be lowering the
