Surprise jobs slump puts pressure on the Fed’s rate plans
Labor force exits drive unemployment lower
The unemployment rate fell to 4.1%, its lowest reading since June 2025, but the dip came for the wrong reasons.
Some 264,000 Americans exited the labor force entirely in July, dragging the participation rate to 61.4%, its lowest level since February 2021.
The share of the population either working or actively searching for employment has now fallen to a five-year nadir.
Job losses were concentrated in local government education, which shed 50,000 positions, restaurants and bars, down 26,000, and retail, which cut 19,000.
The private sector partially offset those losses with 30,000 new positions, led by healthcare.
