The US economy added significantly fewer jobs than expected in July, highlighting growing business uncertainty amid President Donald Trump’s sweeping review of bilateral trade tariffs—an initiative that has triggered retaliatory measures even from longtime American allies.
According to the Bureau of Labor Statistics, nonfarm payrolls rose by just 73,000 last month—only about two-thirds of analysts’ forecasts.
Meanwhile, the unemployment rate ticked up to 4.2 percent from 4.1 percent in June, leaving 7.2 million Americans officially unemployed.
Compounding markets’ concerns, job gains in May and June were sharply revised downward. May’s figure was cut from 125,000 to just 19,000, and June’s from 147,000 to 14,000. Together, these revisions reveal an overestimation of 258,000 jobs, raising questions about the labor market’s earlier perceived resilience.
The July data also showed a notable influx of new labor force entrants—up 275,000 to 985,000—as more individuals began actively seeking their first job. At the same time, long-term unemployment rose by 179,000 to 1.8 million, now representing nearly a quarter of the total unemployed.
The labor force participation rate held steady at 62.2 percent but has declined 0.5 percentage points over the past year. The employment-population ratio was unchanged at 59.6 percent, also down year-over-year.
Financial markets reacted swiftly to the weak employment report. The S&P 500 fell 1.6 percent Friday, the Dow dropped 1.2 percent, and the Nasdaq slid 2.2 percent, as investors bet the data could pressure the Federal Reserve to consider interest rate cuts to stabilize growth.
