US payrolls fall 23,000 in July in shock report; May, June figures sharply revised down

US job creation unexpectedly turned negative in July, a government report showed Friday.

The Bureau of Labor Statistics at the US Department of Labor said nonfarm payrolls fell by 23,000 last month from the prior month — a sharp reversal of the 83,000 gain that economists polled by Dow Jones had forecast.

Equally striking were steep downward revisions to the two preceding months. May’s payroll gain was cut to 63,000 from an initial reading of 129,000, while June’s was revised down to 20,000 from 57,000. Combined, the revisions erased 103,000 jobs from the official record.

The unemployment rate edged down to 4.1 percent from 4.2 percent the previous month, coming in below the 4.2 percent analysts had expected. However, analysts said the decline reflected a shrinking labor force rather than genuine job-market strength. The labor force participation rate fell to 61.4 percent, suggesting that fewer people were entering the workforce or actively seeking work — a dynamic that mechanically pushes the unemployment rate lower.

By sector, local government education shed 50,000 jobs, the steepest decline of any industry. Retail trade lost 19,000 positions, led by general merchandise stores and gas stations, while the financial sector shed 14,000. Health care bucked the trend, adding 22,000 jobs, though the gain fell short of its average monthly increase over the past year.

psj@heraldcorp.com