U.S. job growth slowed more than expected in July while the prior month’s data was revised sharply lower, pointing to a sharp moderation in the labor market.
Nonfarm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June, the Labor Department’s Bureau of Labor Statistics said in its closely watched employment report on Friday. Economists polled by Reuters had forecast payrolls increasing by 110,000 jobs after rising by a previously reported 147,000 in June. The unemployment rate rose to 4.2% from 4.1% in June.
Estimates ranged from no jobs added to an increase of 176,000 positions. The Federal Reserve on Wednesday left its benchmark interest rate in the 4.25%-4.50% range.
Fed Chair Jerome Powell’s comments after the decision undercut confidence the central bank would resume policy easing in September as had been widely anticipated by financial markets and some economists.
Though Powell described the labor market as being in balance because of supply and demand both declining simultaneously, he acknowledged this dynamic was “suggestive of downside risk.”
Job growth has slowed amid uncertainty over where President Donald Trump’s tariff levels will eventually settle. Trump on Thursday slappeddozens of trading partners with steep tariffs ahead of a Friday trade deal deadline, including a 35% duty on many goods from Canada.