July Jobs Report: U.S. Loses 23,000 Jobs

In July 2026, the U.S. economy lost 23,000 nonfarm payroll jobs, marking the first monthly decline in employment after several months of modest job growth.

Revisions to prior months were negative overall. May’s total was revised down to +63,000, (down from +172,000) while June was revised down to +20,000 (from +57,000), bringing combined employment 103,000 lower than previously reported.

The unemployment rate edged down to 4.1%, with 6.9 million Americans unemployed, according to the U.S. Bureau of Labor Statistics.

Is the U.S. Job Market Growing?

July’s employment report suggests the labor market is cooling further, with payroll employment slipping into negative territory despite unemployment remaining relatively low.

Healthcare continued to add jobs, while losses in local government education, retail trade, and financial activities weighed on overall employment. Many other major industries, including manufacturing, construction, professional and business services, transportation, and leisure and hospitality, experienced little change.

Although the unemployment rate declined slightly, continued downward revisions to previous months and slowing hiring trends point to a labor market that is losing momentum.

U.S. Unemployment Rates by Group for July 2026

• Adult women: 3.7%
• Adult men: 3.9%
• Teenagers: 12.1%
• Whites: 3.6%
• Blacks: 6.3%
• Asians: 4.0%
• Hispanics: 4.6%

Unemployment rates across most demographic groups changed little in July. However, the unemployment rates for teenagers and Hispanic workers declined, while the rate for Black workers edged lower.

Key Employment Statistics for July 2026

• Long-term unemployed (27 weeks or more): 1.8 million, representing 25.5% of all unemployed, edging down from June.
• Short-term unemployed (less than 5 weeks): Declined to 2.0 million, down 344,000 over the past year.
• Average hourly earnings: Increased by 2 cents to $37.62, up 3.2% over the past year. Production and nonsupervisory employees earned $32.40, up 4 cents.
• Average workweek: Held steady at 34.3 hours. Manufacturing hours remained at 40.4 hours, while production and nonsupervisory employees averaged 33.8 hours.
• Labor force participation rate: 61.4%
• Employment-population ratio: 58.9%

The number of workers employed part time for economic reasons changed little at 4.8 million, suggesting underemployment remained relatively stable despite weaker payroll growth.

Sectors with Notable Job Trends in July

Healthcare

Healthcare added 22,000 jobs in July, continuing its steady upward trend.

Most of the gains occurred in ambulatory health care services (+18,000), reinforcing the sector’s role as one of the labor market’s most consistent sources of job growth.

Local Government Education

Employment in local government education declined by 50,000 jobs in July after little net change over the previous year.

The decline represented the largest job loss among major industries during the month and weighed heavily on overall payroll employment.

Retail Trade

Retail trade lost 19,000 jobs in July.

Job losses were concentrated among warehouse clubs, supercenters, and general merchandise retailers, as well as gasoline stations. These declines were partially offset by gains at sporting goods, hobby, musical instrument, book, and miscellaneous retailers.

Financial Activities

Financial activities shed 14,000 jobs in July, continuing the sector’s downward trend.

Losses were concentrated in credit intermediation and insurance carriers. Since peaking in May 2025, employment in financial activities has declined by 121,000 jobs.

July Jobs Report Summary

The July 2026 jobs report marked a shift in the labor market, with payroll employment declining by 23,000 jobs following substantial downward revisions to the previous two months.

Healthcare remained a bright spot, while local government education, retail trade, and financial activities posted notable losses.

The unemployment rate edged down to 4.1%, wage growth slowed to 3.2% year over year, and average hours worked remained unchanged.

Overall, the labor market continues to soften, with weaker hiring, declining payroll employment, and downward revisions suggesting employers are becoming more cautious even as unemployment remains historically low.

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