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.
Arizona experienced increases to both unemployment and jobs in the month of June.
The latest monthly update from the Joint Economic Committee (JEC) reflected that Arizona was one of seven states to experience an increase in unemployment and one of 34 states to experience an increase in jobs last month.
Arizona unemployment rose by 0.1% for a total of 4.9%. In other words, employment fell by 22,427 last month and by 91,024 over the past 12 months. That unemployment rate reflects the state’s highest rate since the pandemic.
Labor force participation fell by 0.4% to 60.3% last month, nearing the state’s 10-year low. This decline marked the fifth consecutive month of the downward trend. Over the past 12 months, the state’s labor force participation rate fell by 1.8%. Overall, Arizona ranks 37th in the nation for labor force participation. The state reached its 10-year high in November 2019, at 62.2%, and sank to its 10-year low in April 2020, at 60.2%.
Net payroll jobs grew by 2,400 after a loss of 1,600 net payroll jobs in May. Arizona’s nonfarm payroll employment increased in nine of the past 12 months.
Arizona also ranked 15th in the nation for percentage gain in nonfarm payroll employment over the last 12 months. The state’s private sector added 2,500 net private payroll jobs, reaching a total of 30,300 private payroll jobs over the past 12 months.
An analysis from the Common Sense Institute (CSI) found that Arizona outperformed the nation for job growth in June. CSI found Arizona’s national growth rate to be 0.72%, more than double the national growth rate of 0.32%.
CSI did warn that May’s employment estimates underwent significant revisions, which indicated volatility of monthly labor data. The state initially reported gaining 2,000 jobs for that month. The decline of 1,600 jobs marked one of the largest downward revisions in the nation, per CSI.
JEC reported that Arizona’s best performing sectors for employment from May to June were trade, transportation, utilities, and professional and business services, collectively accounting for the addition of 5,700 jobs. The worst performing sectors were leisure and hospitality and manufacturing, collectively accounting for the loss of 4,200 jobs.
From June 2025 to June 2026, the best performing sectors for employment were private education and health services and professional and business services, collectively accounting for the addition of 30,500 jobs. The worst performing sectors were leisure and hospitality and state and local government, collectively accounting for the loss of 9,900 jobs.
CSI found that Arizona’s mining sector was the fastest-growing industry in the state over the past year. The sector added 1,400 jobs over the past 12 months, a growth of nearly 9%. CSI also found that education and health services also grew at a steady clip of about 3.7%, outpacing national growth.
Nationally, unemployment fell in 30 states, rose in seven states, and remained unchanged in 14 states. The District of Columbia was included in the national analysis and maintained the highest unemployment rate, 6%. South Dakota had the lowest unemployment rate, 2%.
Payroll jobs rose in 34 states and fell in 17 states. Alaska and New Hampshire had the largest payroll job percent increase, and West Virginia had the largest payroll job percent decline.
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The U.S. labor market continued to expand in June, but at a significantly slower pace than economists expected, as hiring cooled and fewer Americans participated in the workforce, according to the latest Monthly Employment Update released last week by the Joint Economic Committee.
The economy added 57,000 non-farm payroll jobs in June, including 49,000 private-sector jobs and 8,000 government positions. While the national employment rate edged down from 4.3% to 4.2%, the improvement coincided with a 0.3 percentage-point decline in the labor force participation rate to 61.5%, indicating fewer Americans were either working or actively seeking employment.
The broader U-6 unemployment rate, which includes underemployment workers and those marginally attached to the labor force, also declined from 8.1% to 7.9%.
The June report follows downward revisions to previous employment data. The Bureau of Labor Statistics revised May’s job growth downward by 43,000 jobs, reducing the month’s gain from 172,000 to 129,000 jobs. April’s final revision, meanwhile, increased payroll growth by 33,000 jobs to a total gain of 148,000.
Among industries, private education and health services led monthly hiring with 69,000 new jobs, followed by professional and business services, which added 36,000 positions. Leisure and hospitality posted the largest decline, shedding 61,000 jobs, while the information sector lost 9,000 positions.
Over the past year, private education and health services has remained the nation’s strongest-performing sector, adding 648,000 jobs, followed by leisure and hospitality with 114,000.
Federal government employment experienced the steepest annual decline, falling by 258,000 jobs, while financial activities lost 100,000 positions.
Despite slower hiring, wages continued to outpace inflation. Average weekly earnings for all private-sector employees increased 3.82% over the past year, while average hourly earnings rose 3.52%.
Production and nonsupervisory workers saw annual increases of 3.73% in weekly earnings and 3.42% in hourly earnings.
Job Openings Hold Steady Despite Cooling Labor Market
Separate data from the Job Openings and Labor Turnover Survey showed labor demand remained relatively stable. Total job openings increased by 9,000 in May to 7.59 million nationwide, with the job openings rate holding steady at 4.6%
Leisure and hospitality recorded the largest increase in available positions, followed by trade, transportation, and utilities, while private education and health services posted the largest decline in openings.
State-level employment data reflected a mixed picture across the country. Unemployment rates declined in 20 states during May, increased in nine states, and remained unchanged in 22 states and the District of Columbia.
The District of Columbia recorded the nation’s highest unemployment rate at 6.1% while South Dakota posted the lowest at 2.1%
Payroll employment increased in 38 states and fell in 13 states during May. West Virginia recorded the nation’s largest percentage increase in payroll employment at 1.4% while Montana experienced the largest decline at 0.5%.
Arizona continued to rank among the nation’s stronger performing states for job growth despite signs of a slowing labor market.
The state added 2,000 net payroll jobs in May after adding 8,100 jobs in April. Over the past 12 months, Arizona has added 21,200 payroll jobs, tying for the 10th nationally in percentage growth of non-farm employment.
Arizona’s private sector added 22,900 jobs over the past year, ranking tied for ninth nationally in private-sector payroll growth.
Arizona’s unemployment rate increased slightly to 4.8% in May up from 4.7% the previous month and 4.3% one year earlier. Employment in the state declined by 16,293 during the month and has fallen by more than 66,000 over the past year.
The state’s labor force participation rate also weakened, falling from 61% to 60.7% in May, placing Arizona 37th nationally.
Nationally, labor force participation remained at 61.8% during May before declining to 61.5% in June.
Arizona’s strongest monthly employment gain came in construction, which added 1,300 jobs, and financial activities, which added 700 jobs. State and local government employment declined by 1,000 positions, while professional and business services lost 300 jobs.
Over the past year, Arizona’s private education and health services sector led all industries with 16,600 new jobs, followed by professional and business services with 8,100.
Financial activities experienced the largest annual decline, losing 4,000 jobs, while federal government employment fell by 3,200 positions.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
Arizona’s unemployment rate has now hit a new high following the COVID-19 pandemic.
The state’s unemployment rate neared 5% according to a new data analysis report from the Common Sense Institute of Arizona (CSI). Based on this newly calculated rate, Arizona has the 12th-highest unemployment rate in the nation.
Unemployment hit 4.8% in May, with CSI saying broader data indicators have revealed the state’s labor market to be cooling despite job growth.
The addition of 2,000 non-farm jobs in May put Arizona at 30th for national job growth. Overall, the nation experienced growth with the addition of 172,000 jobs.
As for job growth year-over-year, Arizona added over 21,200 jobs. That qualified the state as the 10th best in the nation for job growth year-over-year.
Mining jobs increased by about 1,300 over the past year. CSI attributed this growth to the increased demand for copper by electric vehicles, artificial intelligence technology, and data centers.
Manufacturing jobs also increased by 500 over the past year. Trade, transportation, and utility jobs declined by 1,600 over the past year.
Arizona’s labor participation also hit a post-pandemic milestone. The state’s labor force participation rate fell just below 61 percent: the lowest level seen since 2020. Last May, the labor force participation rate was over 62 percent.
Along with rising unemployment and compressed labor participation, Arizona’s private-sector wages increased by over three percent over the year to $35.78. However, that total lags behind the national average of $37.53.
Arizonans may have felt these changes to Arizona’s employment climate more acutely due to major year-over-year changes with state spending.
CSI attributed the state’s budget shortfall to overspending.
Another recent analysis released earlier this month by CSI found that the state budget has experienced rapid growth over the past decade.
In just 10 years, the state budget doubled and now amounts to more than 10% of the state’s gross domestic product.
Per CSI, spending pressures have remained elevated despite normalized revenue growth.
Some items that CSI said to blame were the disparities between Arizona Health Care Cost Containment System (AHCCCS) enrollment and member costs, elevated demands from the Development Disabilities Program (DDP), and federal payment error rates impacting Supplemental Nutrition Assistance Program (SNAP) obligations.
AHCCCS enrollment fell by about 10% (over 200,000 people) but average per-member costs increased by 14%.
DDP was projected to require an additional $400 million in state spending by next year.
And the state may have to cover $300 million in annual SNAP cost-sharing obligations should federal payment error rates fail to be reduced in the near future.
Total state spending reached over $70 billion in the 2026 fiscal year, and estimates projected spending to approach $75 billion in the 2027 fiscal year. Of the 2026 fiscal year total state spending, close to $50 billion is expected to come from non-appropriated funds.
CSI found that spending not subject to regular legislative appropriations has grown by more than 150% over the past decade, though appropriated spending grew by about 100%.
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Small business job openings declined sharply in May while concerns over rising labor costs reached the highest level in the survey’s history, according to the National Federation of Independent Business (NFIB) May Jobs Report released Friday.
The NFIB Small Business Employment Index remained essentially flat in May, standing at 100.3 after 100.4 in April. This marks the third consecutive monthly decline. The index now sits below the 2025 average of 101.2, though it remains slightly above the long-term historical average of 100.
In May, 29% of small business owners reported job openings they could not fill, a 5-point drop from April and the lowest reading since May 2020. Openings for skilled workers fell 2 points to 27%, while openings for unskilled positions dropped 4 points to 9%.
“Concerns about rising labor costs increased significantly to the highest reading in the survey’s history,” stated Chief Economist Bill Dunkelberg. “Small business owners are facing mounting pressure to retain workers, and many firms are navigating costly new state mandates. While current conditions restrict Main Street’s already-thin profit margins, compensation measures remain steady for now.”
Arizona-specific concerns added to the unease. “Arizona small businesses are growing increasingly uneasy as labor costs climb and uncertainty around state tax policy remains unresolved,” NFIB State Director Chad Heinrich added. “Failure to conform with the business provisions Congress made permanent at the federal level will result in a tax hike on Main Street Arizonans. Small businesses need certainty to plan, invest, and create jobs, and time is running short for lawmakers to deliver.”
Looking ahead, hiring plans weakened further. A seasonally adjusted net 9% of owners plan to create new jobs in the next three months, down 4 points from April and the lowest level since May 2020. This falls below the historical average of a net 11%.
Overall, 55% of owners reported hiring or trying to hire in May, up slightly from April. However, 46% of all owners (representing 84% of those actively hiring or trying to hire) reported few or no qualified applicants for open positions.
Labor quality, the most important business problem eased to 13%, the lowest since December 2016. In contrast, labor costs surged in importance, cited by 14% of owners as their top problem — a 5 point increase from April and the highest reading on record.
Despite softening demand for new hires, compensation pressures persisted. A net 31% of owners reported rising worker compensation in May, up 1 point from April. Plans to raise compensation in the coming three months held steady at 18%.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
