The July employment report shows a softening labor market

Only 73,000 new jobs were created last month

By Mark Huffman of ConsumerAffairs

August 1, 2025

• The U.S. economy added only 73,000 jobs in July, well below the projected 100,000. Job growth estimates for May and June were also revised downward.
• Job gains were concentrated in healthcare (+55,000) and social services (+18,000), while the federal government saw a loss of 12,000 jobs.
• Average hourly earnings rose by 0.3% to $36.44, with a 3.9% year-over-year increase. Nonsupervisory workers earned $31.34 on average. Labor force participation held steady at 62.2% in July but has declined 0.5 points over the year, and the employment-population ratio was unchanged at 59.6%.

The U.S. economy produced 73,000 jobs in July, significantly fewer than the 100,000 that were predicted. The Bureau of Labor Statistics also revised the job creation totals for May and June sharply lower, suggesting a softening in the job market.

As in previous months this year, job applicants had the best chance of being hired if they were seeking work in healthcare or social services. The unemployment rate was 4.2% in July.

In July, the number of long-term unemployed those out of work for 27 weeks or more increased by 179,000 to 1.8 million. The long-term unemployed accounted for 24.9 percent of all unemployed people.

The labor force participation rate, at 62.2%, changed little in July but has declinedby 0.5 percentage points over the year. The employment-population ratio, at 59.6 percent, alsochanged little over the month but was down by 0.4 percentage point over the year.

Top sectors

Heres where the jobs were and where they werent:

• Healthcare (+55,000)

• Social services (+18,000)

• Federal government (-12,000)

Employment showed little change in July in other major industries, including mining,quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retailtrade; transportation and warehousing; information; financial activities; professional andbusiness services; leisure and hospitality; and other services.

People with jobs earned a little more last month. Average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.3%, to $36.44 in July. Over the past 12 months, average hourly earnings have increased by 3.9%.

In July, average hourly earnings of private-sector production and nonsupervisory employees rose by 8 cents, or 0.3%, to $31.34.

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