U.S. employers added just 73,000 jobs in July, signaling a dramatic slowdown as recent tariff hikes and labor market revisions point to broader economic weakness.
The unemployment rate rose to 4.2%. Job gains from May and June were revised down by a combined 258,000, wiping out confidence in the labor market earlier this year.
Health care and social assistance accounted for nearly all job growth. Manufacturing lost 11,000 jobs, while construction and hospitality added only modest gains. The federal government shed 12,000 jobs, with total losses this year reaching 84,000 in total.
Economists cited trade uncertainty and tighter immigration enforcement as key drags. Labor force participation declined, and the average duration of unemployment rose to 24.1 weeks.
Markets fell sharply on the news, and expectations for a Federal Reserve rate cut in September surged. Despite slowing job growth, wages rose 3.9% from a year ago.
President Trump defended his tariff policy and called for immediate rate cuts, but economists warned that hiring is nearing stagnant, with deeper risks ahead.
President Trump Reacts
Donald Trump reacted to the latest job report on Friday in a post on Truth Social, the Trump-centric platform that he owns. The president responded to the labor report by accusing “Biden Appointee” Dr. Erika McEntarfer (the Commissioner of Labor Statistics) of faking the job numbers prior to the 2024 election—undercutting her work as a neutral party at the agency. McEntarfer was confirmed as Commissioner 86 to 8, signaling broad bipartisan support at the time.
In the post, Trump states that he has directed the immediate firing of McEntarfer, and that she will be replaced with “someone much more competent and qualified.” Critics question the ethics of replacing a neutral party with a Trump-aligned Commissioner, arguing that labor reports going forward could be misleading or fictitious.
Later on in the post, he shifts blame to Federal Reserve Chair Jerome Powell—whom he has publicly clashed with recently over interest rates. Trump stated that Powell should also be “put out to pasture.” The President does not have the power to fire the Fed Chair.
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