US Adds 73K Jobs in July, Jobless Rate Rises to 4.2% Amid Govt Cuts
Job growth in the United States decelerated in July, with nonfarm payrolls increasing by just 73,000 and the unemployment rate ticking up to 4.2%. This slowdown comes as employment within the federal government continues to decline, with a total loss of 84,000 jobs since peaking in January.
The labor force also saw a significant rise in new entrants—individuals seeking employment for the first time—with 275,000 added in July, bringing the total to 985,000. The overall number of unemployed Americans rose to 7.2 million. Long-term unemployment, defined as being jobless for 27 weeks or more, surged by 179,000 to 1.8 million, now accounting for nearly 25% of all unemployed individuals.
Economists point to mounting uncertainty surrounding President Donald Trump's escalating trade war as a key factor behind the labor market's slowdown. On Thursday, Trump announced sweeping new tariffs, including a 25% levy on Indian imports, just ahead of a crucial trade deal deadline.
The White House's strict immigration policies and a rise in retirements are also tightening the labor supply. According to Reuters, the U.S. economy now needs to produce only about 100,000 jobs per month—or fewer—to keep up with working-age population growth, due to the drop in immigration.
Although the unemployment rate had dipped to 4.1% in June, partly due to people leaving the workforce, July’s increase kept the rate within the 4.0% to 4.2% range it has held since May 2024.