The U.S. economy unexpectedly lost 23,000 jobs in July, a sign of a slowdown that could complicate the Federal Reserve's decision on interest rates when it meets in September. The decline in nonfarm payrolls came as a surprise to economists, but the unemployment rate also fell, leaving investors with mixed signals about the health of the labor market.
The Trump administration played down the report, attributing the loss to federal downsizing and layoffs in World Cup hospitality. Officials suggested the figures did not reflect the broader economy's strength.
The weak jobs number follows a period of steady hiring and adds uncertainty about the pace of future rate hikes. The Fed has been weighing whether to raise rates again, and the softer employment data could give policymakers reason to pause.
Despite the overall loss, the drop in the unemployment rate suggested some workers found jobs, complicating the picture. Analysts said the report points to a cooling labor market, though not necessarily a sharp downturn.
The July figures mark the first monthly decline in jobs in some time, underscoring challenges for the administration as it faces a potentially tougher economic environment heading into next year.