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.
In July, jobs decreased by 23K jobs (+30K private sector, -53K govt). At the same time, the unemployment rate decreased by 0.1pp to 4.1% while the labor force participation rate decreased by 0.1pp to 61.4%. The broadest measure of unemployment remained unchanged at 7.9%.…
— Joint Economic Committee Republicans (@JECRepublicans) August 7, 2026
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.
House Speaker Mike Johnson said Wednesday that congressional Republicans must make temporary federal income-tax deductions for qualified tips and overtime permanent, tying their continuation to the outcome of the November midterm elections.
Johnson made the commitment during a press conference at PepsiCo’s Frito-Lay manufacturing facility in Casa Grande, where he joined Treasury Secretary Scott Bessent and Rep. Juan Ciscomani (R-AZ-06) for a factory tour and roundtable discussion with Arizona manufacturers and business leaders.
Responding to a question from AZ Free News about the provisions’ scheduled expiration after 2028, Johnson said Republicans intend to pursue an extension.
“We have to make these tax cuts permanent,” Johnson said during the press conference. “We have to ensure that the great benefit that people are feeling right now continues.”
The Working Families Tax Cuts established deductions for qualified tips and overtime compensation beginning with the 2025 tax year and continuing through 2028. The tips deduction is capped at $25,000 annually, while individuals may deduct up to $12,500 in qualified overtime compensation, or $25,000 for married couples filing jointly. The overtime deduction applies to compensation exceeding a worker’s regular rate of pay, such as the additional half-time portion of time-and-a-half wages, according to the Internal Revenue Service.
Johnson argued that continued Republican control of Congress would be necessary to extend the provisions.
“If the Republicans lose control of the Congress in this election cycle in 2026, you can kiss those tax cuts goodbye,” Johnson said.
He also said no Democratic members of the House or Senate supported the tax package and argued that the November election would determine whether Congress extends its temporary provisions.
The law, enacted as Public Law 119-21, permanently extended several provisions of the 2017 Tax Cuts and Jobs Act while establishing the temporary deductions for tips, overtime, qualifying vehicle-loan interest, and eligible seniors. The Congressional Budget Office (CBO) estimated that the law would increase primary federal deficits by approximately $3.4 trillion between 2025 and 2034 through a $4.5 trillion reduction in revenues, partially offset by $1.1 trillion in lower direct spending. A separate CBO estimate placed the total deficit effect at approximately $4.1 trillion when additional debt-service costs are included.
Arizona adopted corresponding state income-tax deductions for qualified tips and overtime through the budget agreement between Arizona Republicans and Gov. Hobbs in June.
Bessent, Johnson, and Ciscomani toured the Casa Grande facility before meeting with local business owners and managers to discuss manufacturing, taxation, and economic growth. The City of Casa Grande lists more than 300 associates at the Frito-Lay facility, which produces Lay’s, Fritos, Tostitos, Doritos, and Cheetos products.
Bessent said in a post on X that the visit focused on the administration’s “America First pro-growth economic agenda” and the effects of the Working Families Tax Cuts one year after President Donald Trump signed the legislation.
One year after President Trump signed the Working Families Tax Cuts into law, the promise of the American Dream is extending to every factory floor. It was great to join Speaker Johnson and Congressman Ciscomani at the Frito-Lay facility in Casa Grande, Arizona to discuss how the… pic.twitter.com/crTUUOySqx
— Treasury Secretary Scott Bessent (@SecScottBessent) August 6, 2026
The Treasury Department says 97 percent of filers received a tax cut compared with what they would have owed if the 2017 tax provisions had expired. The Treasury reported $325 billion in total refunds, $82 billion claimed through individual tax-relief provisions, and an average refund of approximately $3,300.
During the press conference, AZ Free News asked Ciscomani what specific economic developments in the Sixth Congressional District could help reverse the continuing financial pressure facing Arizona households and the state’s declining workforce participation.
The question cited a recent Common Sense Institute (CSI) analysis, which found that Phoenix-area prices remained 33.4 percent higher than in June 2019. CSI estimated that the higher price level is costing a typical Arizona household an additional $1,673 per month.
Arizona’s unemployment rate also increased to 4.9 percent in June, its highest level since the COVID-19 pandemic, while labor-force participation fell to 60.3 percent. The participation rate was near the state’s 10-year low after declining for five consecutive months.
Ciscomani responded by citing projected increases of between $7,400 and $10,600 in take-home pay for an average Arizona family and approximately $3,500 in lower taxes. He also pointed to accounts from parents on a youth football team he coaches who told him they had received the largest tax refunds of their lives.
“This is real money back in people’s real pockets,” Ciscomani said.
The $7,400-to-$10,600 figure has been promoted by Republican lawmakers as a projected increase in take-home pay. It is separate from the Treasury’s reported national average refund of approximately $3,300. Rep. David Schweikert (R-AZ-01) previously described the estimate as including lower taxes and projected wage growth.
“Our opponents on the Democrat side believe that just either freebies or more government programs are the ones that create that. And creating more government jobs is not. Creating jobs is what this company here is doing by expanding and hiring more people, improving the safety of the company, and also attracting more people to work here. That is what’s actually moving forward.”
Ciscomani said allowing families to retain more of their earnings would increase consumer spending and stimulate private-sector job creation. He cited the host facility’s expansion and hiring as an example of private-sector economic activity.
“From the numbers that we know as statistics and also testimonials that I hear about everywhere I go, we know that families are overall doing better,” Ciscomani said.
He acknowledged that Arizona families continue to face financial difficulties and attributed much of the remaining pressure to inflation experienced during former President Joe Biden’s administration.
“Are there hardships? Are there things that people are struggling with? Absolutely,” Ciscomani said. “And we don’t ignore that.”
Ciscomani said the country was “clawing” its way out of the earlier inflationary period and described the economy as moving in the right direction. “We have more work to do, but we’re definitely on the right track.”
Johnson concluded that maintaining Republican congressional majorities would be central to extending the tips and overtime provisions beyond their current expiration.
“Elections have consequences,” Johnson said. “They really do.”
Arizona Senate President Warren Petersen (R-LD14) added endorsements from two law enforcement associations last week as he continued building police support in his campaign against Democrat Attorney General Kris Mayes.
The Arizona Conference of Police and Sheriffs (AZCOPS) and the Maricopa County Colleges Police Officers Association (MCCPOA) endorsed Petersen, according to a release from his campaign. Petersen won the Republican nomination in July and will face Mayes in the general election.
With the AZCOPS endorsement, Petersen’s campaign said he now has support from Arizona’s six largest law enforcement organizations. His broader coalition includes county sheriffs, county attorneys, and retired law enforcement officials.
In a post to X prior to the announcement, Petersen wrote, “For the first time in AZ history, a challenger to the sitting AG has the overwhelming support from law enforcement. As your next attorney general, I will fight crime, defend the laws and the Constitution, and root out fraud, waste, and corruption.”
For the first time in AZ history, a challenger to the sitting AG has the overwhelming support from law enforcement. As your next attorney general I will fight crime, defend the laws and the Constitution and root out fraud, waste and corruption. pic.twitter.com/wDXRHpFDom
AZCOPS represents more than 4,500 members across Arizona. The organization says it represents public safety employees in legal, employment, and political matters and advocates for compensation, benefits, and due-process protections.
“Following extensive research and consideration by AZCOPS Legislative Committee and Executive Board, AZCOPS is proud to endorse you for election for Arizona’s Attorney General,” AZCOPS Executive Director David Stone said in the campaign release.
“AZCOPS examines several factors when determining whether to issue endorsements, including a candidate’s record of accomplishments, commitment to public safety, and willingness to work collaboratively with the leadership of our member organizations,” Stone added. “[Warren Petersen’s] unwavering support for law enforcement and public safety is appreciated by our members and the communities they serve.”
Stone is a retired Tucson Police Department officer who later worked as a private investigator and criminal investigator for Pima County.
“I’m grateful for these latest endorsements from AZCOPS and MCCPOA,” Petersen said. “It’s clear that the men and women in law enforcement have made their decision for the state’s next top cop.”
Petersen criticized Mayes’ record and pledged to support law enforcement agencies if elected.
“Since taking office, Kris Mayes has attacked cops and undermined their authority in communities across the state,” Petersen said. “As Attorney General, I’ll support law enforcement as they carry out their duties to protect citizens and restore confidence in the relationship with the men and women who keep our community safe.”
Petersen’s campaign said the latest endorsements make him the first challenger to an incumbent Arizona attorney general to receive support from the state’s six largest police organizations.
Before Friday’s announcement, Petersen had received endorsements from the Arizona Fraternal Order of Police, Arizona Police Association, Arizona State Troopers Association, Combined Law Enforcement Associations of Arizona, and Phoenix Police Sergeants and Lieutenants Association.
Petersen has also received endorsements from five Republican attorneys general. Nebraska Attorney General Mike Hilgers became the latest, joining Utah Attorney General Derek Brown, Idaho Attorney General Raúl Labrador, West Virginia Attorney General J.B. McCuskey, and Indiana Attorney General Todd Rokita.
Former Maricopa County Sheriff Joe Arpaio and retired Border Patrol agent Art Del Cueto have also endorsed Petersen.
Petersen has made law enforcement and public safety central parts of his campaign. His campaign platform calls for enforcing Arizona law, holding criminals accountable, protecting the rights of crime victims, and supporting law enforcement officers.
His campaign said in a press release on Friday, “The support from these officials and organizations reflects confidence that Petersen will restore integrity to the Attorney General’s Office, enforce the law fairly and fearlessly, and stand shoulder to shoulder with those who protect Arizona communities every day.”
Treasury Secretary Scott Bessent is expected to visit Arizona on Wednesday and Thursday, with stops including a Casa Grande appearance alongside House Speaker Mike Johnson (R-LA) and Rep. Juan Ciscomani (R-AZ-06). The tentative itinerary, provided exclusively to AZ Free News by Treasury Department officials, also includes meetings with manufacturers, business leaders, and community bankers.
Bessent is scheduled to travel to the state on August 5 and 6 to discuss the Trump administration’s economic agenda and efforts to strengthen the integrity of the nation’s financial system, Treasury officials said.
The visit will include a tour of a manufacturing facility in Casa Grande with Johnson and Ciscomani. The three officials are also expected to participate in an economic roundtable with Arizona business leaders.
The Treasury Department had not yet publicly identified the manufacturing facility as of Monday night.
The administration plans to use the event to highlight the effects of the tax and business provisions it refers to as the Working Families Tax Cuts, including incentives for domestic manufacturing and capital investment.
The tax provisions were enacted as part of Public Law 119-21, which President Donald Trump signed on July 4, 2025. The law permanently extended several provisions of the 2017 Tax Cuts and Jobs Act and created temporary federal income-tax deductions for qualified tips and overtime compensation.
The law also allows businesses to immediately deduct qualifying research and development costs and the cost of certain equipment and machinery. It provides accelerated deductions for qualifying investments in new and expanded manufacturing facilities, according to a White House summary.
Arizona Republican lawmakers and Governor Hobbs reached a bipartisan budget agreement in June that eliminated state income taxes on qualified tips and overtime, increased the standard deduction, and added other tax provisions tied to the federal law. Republican legislative leaders described Arizona as the only state to fully adopt the federal tax package at the state level.
🚨FOR IMMEDIATE RELEASE: Arizona Becomes Only State in the Nation to Deliver Historic Trump Tax Cuts As Part of Bipartisan FY 2027 Budget Agreement
The White House, citing a National Association of Manufacturers analysis, said the law’s manufacturing provisions sustained an estimated 119,000 Arizona jobs, $22 billion in state economic output, and $11 billion in wages.
The Congressional Budget Office (CBO) estimated that the law would increase federal deficits by approximately $3.4 trillion from 2025 through 2034, excluding macroeconomic and debt-service effects. The CBO attributed the increase to an estimated $4.5 trillion reduction in revenues, partially offset by a $1.1 trillion reduction in direct spending.
During a separate engagement, Bessent is expected to meet with community bankers from across Arizona alongside Comptroller of the Currency Jonathan Gould.
Bessent and Gould reportedly plan to discuss the administration’s efforts to reduce regulatory burdens on community banks and expand their ability to finance local businesses and economic development.
Reducing regulatory and supervisory burdens on community banks has been one of Gould’s stated priorities. The agency said in May that it had begun tailoring examinations according to a bank’s size, complexity, and risk profile, while giving smaller institutions greater flexibility to use a simplified capital framework.
The Office of the Comptroller of the Currency (OCC) has also revised its model-risk guidance and narrowed the scope of information-technology and cybersecurity examinations for community banks, according to an agency announcement.
“Community banks are anchors of local economies, providing essential banking services and small business lending that helps power job creation,” Gould said in the announcement.
The Arizona meeting is also expected to address the administration’s campaign against fraud, identity theft, money laundering, and other illicit activity involving the financial system.
Trump issued an executive order in May directing Treasury and federal banking regulators to strengthen customer-identification requirements and consider changes to regulations implementing the Bank Secrecy Act.
The order directed Treasury and federal financial regulators to propose stronger risk-based customer due-diligence requirements and consider changes to customer-identification rules. It instructed regulators to examine the use of foreign consular identification documents, invalid or mismatched Social Security and taxpayer-identification numbers, payroll-tax schemes, and accounts associated with workers who lack employment authorization.
It also directed financial regulators to consider whether banks should obtain additional information concerning immigration status and employment authorization when those details are relevant to fraud, identity misrepresentation, sanctions evasion, or another identified financial risk.
The Treasury’s Financial Crimes Enforcement Network (FinCEN ) subsequently issued a June 5 advisory urging banks and other financial institutions to identify and report suspicious activity associated with identity theft, payroll fraud, and the unlawful employment of people without work authorization.
FinCEN said some employers conceal unauthorized workers by using stolen identities, mismatched Social Security numbers, false payroll information, or off-the-books payment arrangements. The agency reported that financial institutions filed suspicious activity reports involving more than $2.5 billion in transactions associated with potential payroll-tax fraud during 2025.
The advisory was issued jointly with the Federal Deposit Insurance Corporation, OCC, and the National Credit Union Administration, and in coordination with the Internal Revenue Service.
The Treasury Department said Bessent and Gould will discuss how Arizona community banks can support the administration’s enforcement efforts while continuing to provide financing and banking services to local businesses.
Additional details regarding the facility, participating business leaders, event times, and press access are expected later on Tuesday.
Rep. Eli Crane’s reelection campaign has reserved $2.1 million in fall advertising as the Arizona Republican prepares for a rematch with former Navajo Nation President Jonathan Nez in the state’s Second Congressional District.
The advertising will run across broadcast television, cable, satellite, streaming services, social media, and radio beginning in mid-September, according to an announcement from the Crane campaign.
“The same D.C. Democrats who look down on rural Arizonans because we don’t share their woke values want to pretend like they all of the sudden care about AZ-02,” Crane said. “What they really care about is power.”
“The truth is it is just another seat to them, but not to me,” Crane continued. “This is a district made up of some of the finest people you’d ever meet, folks who pray to God, love their neighbors, work hard, and play by the rules. It is an honor to serve them in Congress.”
Crane said he was prepared to defend his record against Democratic attacks during the general election campaign.
“If the D.C. Democrats want a fight, they’ve got one,” Crane said. “I don’t back down and am more prepared than ever to put my record up against their lies.”
The reservation follows the July release of Crane’s first general-election advertisement, titled “Fight.” The digital ad highlighted Crane’s military service and presented the former Navy SEAL as an advocate for rural Arizona willing to challenge members of both political parties in Washington. Crane served 13 years in the Navy and completed five wartime deployments, including three with SEAL Team 3.
Crane’s campaign previously said it planned to invest at least seven figures in paid media during the general election. The new reservation specifies the amount, platforms, and timing of the planned spending.
The congressman enters the fall with a substantial fundraising advantage. Crane’s campaign reported approximately $9.48 million in total receipts and $2.84 million in cash on hand through the end of June.
Nez reported approximately $3.52 million in total receipts and $1.91 million in cash on hand over the same reporting period. His campaign spent approximately $1.67 million through June.
Crane and Nez were unopposed in their respective party primaries. They are expected to face each other in the November 3 general election along with Libertarian Curtis Goodwin.
The contest is a rematch of the 2024 election, when Crane defeated Nez with 221,413 votes, or approximately 54.5 percent, to Nez’s 184,963 votes, or approximately 45.5 percent. Nez carried Apache, Coconino, and Graham counties, as well as the district’s portions of Maricopa and Mohave counties, while Crane prevailed in Gila, Navajo, Pinal, and Yavapai counties.
Arizona’s Second Congressional District includes Prescott, Flagstaff, and much of the Navajo Nation. The Cook Political Report rates the race “Likely Republican” and gives the district a Republican advantage of seven percentage points in its Partisan Voting Index. Cook reported that Nez finished nine points behind Crane in 2024 while outperforming the Democratic presidential ticket within the district.
Crane was first elected to Congress in 2022 and is seeking a third term. Nez served as president of the Navajo Nation from 2019 through 2023 and is making his second bid for the congressional seat.
Arizona’s general election is scheduled for November 3. Early voting begins October 7, and the voter-registration deadline is October 5.
