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The US labor market has shown signs of gradual weakening. However, new federal data that was issued on Friday indicates that you may have reached a long -awaited wall.
“We are finally in the eye of the hurricane,” wrote Daniel Zhao, chief economist at Career Site Glassdoor.
“After months of warning signs, the July Job report in July confirms that the slowdown not only approaches, but here,” he wrote.
“Very soft” labor market
The employers only added 73,000 jobs in July, the Bureau of Labor Statistics reported on Friday. This balance is less than expected.
Economists generally believe that the US economy has to add around 80,000 to 100,000 jobs per month to keep up with population growth, said Laura Ullrich, director of business research for North America at the building site.
The number in July indicates that the labor market does not keep up with population growth – and therefore contracts together, she said.
Even more than the figures in July: The figures for employment growth for May and June were much weaker than initially assumed, economists said.
The BLS revised the employment growth figures for these months, to 19,000 jobs in May (down of 144,000) and 14,000 in June (from 147,000).
In total, employers added 258,000 fewer jobs than was initially assumed.
Such monthly revisions are typical because the BLS collects additional data from companies and government agencies, but these adjustments were unusually large, said economists.
It is unclear why, they said.
“Really, it only shows a very soft job market,” said Ullrich. “It is not catastrophic. Nevertheless, these are very weak jobs” and not something that you would expect in a strong economy, she said.
The numbers could be revised again in August, said economists.
Customs, other factors, set up the headwind
Employment growth has an average of 35,000 in the past three months than the revised data is taken into account. In contrast, employment growth in the first three months of 2025 was an average of 111,000 per month.
New jobs also mainly focused on health and social welfare sectors, which means that the possibilities were not broad, economists said.
The data “tell a completely different story about the labor market than what we originally thought,” said Zhao from Glassdoor in an interview.
“We had the impression that the labor market surprisingly resistant to economic headwinds like tariffs,” he said.
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President Donald Trump announced a flood of new tariffs on Thursday and set several trading partners of 10% to 41%.
Customs are taxes that pay US companies for articles that they import.
The tariffs for long -term prices for consumers generally increase prices for many companies for many companies by increasing their input costs, economists said. In addition, Trump's approach to tariffs creates uncertainty for companies, which causes many to withdraw the attitude, economists said.
The national setting rate has been around the lowest since 2014, outside the early day of Covid 19 pandemic.
“It is difficult for people to make a decision or change in the face of so much uncertainty,” said Ullrich.
Carntress policy combines other headwinds, such as immigration policy, which has reduced the number of employees available, the cuts of federal members and state expenditure and higher interest rates, said Zhao.
“High level of stagnation” on the job market
There are other signs on the US labor market, said economists.
For example, the employment rate rate has been at the lowest level since 2022, wrote Thomas Ryan, economist from North America at Capital Economics, in a note on Friday.
This is “possibly further proof that President Trump's immigration acceptance and co -documented migrants keep staying away from the labor market, even though they stay in the country,” he wrote.
The unemployment rate rose to 4.2% in July, compared to 4.1% in June, reported the BLS.
The proportion of unemployed Americans, who are unemployed in the long term, means that they have been unemployed for more than six months-has increased to almost 25% since July 2024, the BLS said.
A silver strip for workers: layoffs remain near historical lows.
An environment with low layoffs, attitudes and stops creates challenges for job seekers.
“At the moment there is a high degree of stagnation,” said Ullrich. “There is not much movement in and from jobs.”