The U.S. economy lost 23,000 nonfarm payroll jobs in July, the first monthly decline in more than a year, the Bureau of Labor Statistics reported Aug. 7.
The decline marks a sharp reversal from months of positive payroll growth and is likely to intensify debate in Washington over economic conditions, Federal Reserve interest rate policy and the administration’s economic record.
Losses were concentrated in local government education and retail trade, the BLS said. Health care continued to add jobs, maintaining its position as one of the economy’s most reliable sources of employment growth.
The private sector added 30,000 jobs during the month, partially offsetting the government-sector losses. Acting Labor Secretary Keith Sonderling noted that year-to-date private-sector gains stand at 426,000.
The labor force participation rate was unchanged, according to the report, suggesting that the payroll decline was not driven by workers leaving the labor force in large numbers.
The July figures are the most closely watched monthly economic data point in Washington and on Wall Street. A net payroll loss — even a modest one — typically triggers reassessment of economic forecasts and monetary policy expectations.
The Federal Reserve, which has been weighing the pace of interest rate adjustments, will have the July jobs data in hand ahead of its next policy meeting. Markets had been pricing in continued moderate job growth heading into the second half of 2026.
The report also showed no significant change in average hourly earnings growth, though detailed wage data were not immediately available from the BLS summary release.