By Matthew Holloway |
The U.S. economy lost 23,000 jobs in July as a 53,000-job decline in government employment more than offset a 30,000-job increase in private-sector payrolls, according to new federal labor data released Friday.
The U.S. Bureau of Labor Statistics’ July Employment Situation report found total nonfarm payroll employment declined by 23,000 after increasing by a revised 20,000 jobs in June. The unemployment rate declined from 4.2% to 4.1%.
The Republican side of the Joint Economic Committee, chaired by Arizona Congressman David Schweikert (R-AZ-01), highlighted the figures Friday in its monthly employment update. Schweikert has chaired the bicameral committee since March 2025.
Private-sector payrolls increased by 30,000 jobs during July, while government employment declined by 53,000, according to the Joint Economic Committee’s employment update. Private education and health services gained 25,000 jobs and construction gained 22,000, while state and local government employment declined by 50,000 and leisure and hospitality lost 40,000 jobs.
The decline in the unemployment rate came as the civilian labor force decreased by 264,000 people in July, from approximately 169.36 million to 169.09 million, according to the Bureau of Labor Statistics (BLS). The number of employed people fell by 87,000, while the number counted as unemployed decreased by 178,000. The labor force participation rate slipped from 61.5% to 61.4%.
BLS reported that labor force participation has declined by 0.7 percentage points since January, while the employment-to-population ratio has fallen by 0.5 percentage points over the same period. Approximately 5.9 million people outside the labor force said they wanted a job in July.
The broader U-6 measure of labor underutilization remained at 7.9%. The measure includes unemployed workers, people marginally attached to the labor force and those working part time for economic reasons.
The July payroll decline came in well below economists’ expectations. The Dow Jones consensus had projected an increase of approximately 83,000 jobs.
BLS reported that the decline in local government employment was concentrated in education, which lost 50,000 jobs. Retail trade declined by 19,000 jobs, while financial activities continued a downward trend with a loss of 14,000. Health care added approximately 22,000 jobs during the month, led by an 18,000-job increase in ambulatory health care services.
Federal government employment has fallen by 252,000 jobs since July 2025, according to the JEC, while private education and health services added approximately 550,000 jobs over the same period. Professional and business services increased by 115,000 jobs year over year, while financial activities declined by 114,000.
The latest report also included another round of substantial downward revisions to earlier job estimates.
May payroll growth, initially reported at 172,000 jobs, has now been revised to 63,000, a cumulative reduction of 109,000 jobs from the original estimate. BLS had previously revised May’s figure to 129,000 before Friday’s report reduced it again to 63,000. June employment was revised from a gain of 57,000 jobs to 20,000.
BLS said the latest revisions alone reduced previously reported May and June employment by a combined 103,000 jobs. The agency said monthly revisions result from additional reports received from businesses and government agencies and recalculated seasonal factors.
Annual wage growth slowed in July. Average hourly earnings for employees on private nonfarm payrolls reached $37.62, up 3.2% from a year earlier. Average hourly earnings for private-sector production and nonsupervisory employees stood at $32.40. The average private-sector workweek remained unchanged at 34.3 hours.
Separate BLS Job Openings and Labor Turnover Survey data released Tuesday showed 7.4 million job openings nationwide in June, with the openings rate at 4.4%. Hiring remained at approximately 5.3 million, while total separations were little changed at 5.4 million.
Arizona’s most recent state-level employment figures currently cover June. The Arizona Office of Economic Opportunity’s June employment report showed the state’s seasonally adjusted unemployment rate increased from 4.8% in May to 4.9% in June, compared with the national rate of 4.2% that month.
Arizona’s labor force decreased by 20,204 people from May to June and by 73,302, or 1.9%, compared with June 2025. The state nevertheless recorded 27,900 more nonfarm jobs on a not-seasonally-adjusted basis than it had one year earlier.
BLS data show Arizona had approximately 3.28 million seasonally adjusted nonfarm jobs in June, an increase of about 23,600 jobs, or 0.7%, from a year earlier. Construction employment was up 1.5% year over year, while government employment was down 1.5%.
Arizona’s July employment figures are scheduled for release on August 21.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
