U.S. employers lost 23,000 jobs in July, as the labor market weakened in the face of myriad headwinds.
The unemployment rate ticked down to 4.1 last month, continuing a years-long streak of low joblessness, according to Labor Department data released Friday morning.
Forecasters had expected gains last month of about 80,000 jobs.
In general, economists have been surprised by the labor market’s buoyancy in the face of the Iran war, high inflation, tariffs, immigration restrictions and advancements in artificial intelligence.
Employers froze hiring last year because of uncertainty fueled by Trump administration policies, with payroll growth falling to about 15,000 new positions per month. But in the first half of 2026, companies appeared to acclimate to policy conditions and hiring accelerated to around 100,000 new positions per month, even as the United States pursued a war in Iran that caused gas prices to spike.
Now that pocket of momentum could be ending, economists say, pointing to cooler job growth and wage growth that is barely beating inflation.