Friday, 7 August 2026, 22:02
US employers slammed the brakes in July. The Bureau of Labor Statistics reported Friday that the economy lost 23,000 jobs, a jarring contrast to the 95,000 job gain forecasters had been calling for. The report adds to a pattern of sluggish hiring and shrinking paychecks.
According to the BLS data, the unemployment rate is now either 4.2% or 4.1%, depending on which version of the report you read. One version carried by Action News Now says 4.2%; the published article states 4.1%. Either way, the decline is largely because more people left the labor force, not because hiring picked up.
Pay growth also weakened. Workers' average hourly earnings rose at the slowest annual pace in five years, a sign that inflation is still eating into wages. The July report fell far short of the 95,000 job gain that economists surveyed before the release had expected.
"This was a bleak report, and it signals the labor market is stalling again," said Heather Long, chief economist at Navy Federal Credit Union. "You can explain away a few things for July and a few things for June; but if you step back and look at the bigger picture, the past three months have seen 20,000 average job gains, no matter how you look at it, that's anemic."
Healthcare and social assistance continued its role as the main job engine, adding 22,600 positions. Construction and parts of manufacturing also grew, thanks to AI investment and data-center projects. Professional and business services added 18,000 jobs, and the information sector added 11,000.
Those gains were outweighed by steep losses in local government and leisure/hospitality. Local government shed 57,000 jobs, with 49,600 of those coming from local school districts. Leisure and hospitality lost 43,000 jobs in June and another 40,000 in July, despite the World Cup drawing crowds to bars and hotels.
Economists warn that the school district losses are probably a statistical artifact. "A summer release of district workers running about 5% larger than the historical norm produces a 50,000-job adjusted decline out of a million-job gross swing," said Jason Pride, chief investment strategist at Glenmede. "Distortions of this kind typically reverse as districts staff up for the new school year."
Similarly, the World Cup may have thrown off seasonal adjustments in hospitality. "It's difficult for me to believe that we've lost 83,000 jobs over the last two months in leisure and hospitality services, given that the World Cup has been going on," said Gus Faucher, chief economist at PNC Financial Services.
ADP chief economist Nela Richardson added that high uncertainty is causing hiring to come in fits and starts, and that structural shifts like an aging population and slower immigration mean the economy needs fewer jobs than it once did.
This national report does not break out California-specific employment figures. Still, the sectors driving the numbers, healthcare, construction, and local schools, are deeply connected to California's economy. If the national hiring slowdown persists, the state's labor market is likely to feel the strain in the coming months. Northern California viewers of Action News Now, particularly in the Chico and Redding areas, may see local effects if government and hospitality hiring soften further.
The US labor market has spent the past year in a "low-hire, low-fire" pattern. Employers are cautious because of high interest rates, policy uncertainty, an aging population, and rapid AI adoption. The July report follows several months of downward revisions that show hiring was never as strong as initially reported.
The July jobs report is noisy, with seasonal adjustment quirks inflating losses in schools and hospitality. Yet even after stripping those out, the three-month average gain of 20,000 jobs is far too low to keep pace with a growing population. For job seekers, the message is grim: opportunities are scarce, and wages are not keeping up with prices.
