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The U.S. added fewer jobs than anticipated in July, marking a slowdown in hiring as the unemployment rate edged up, further intensifying pressure on the Federal Reserve to cut key interest rates.
Overall employment increased by just 73,000 jobs last month, falling short of the widely expected 100,000+, the U.S. Labor Department reported on Friday.
As predicted, the July unemployment rate rose to 4.2% from 4.1% in June, staying in line with March through May levels.
Meanwhile, jobs gains for the previous two months were significantly revised lower than previously reported, down a combined 258,000, revealing that spring hiring was much weaker than initially reported by the federal government.
For May, the change in employment was revised down by 125,000 jobs, from 144,000 to 19,000, and for June, it was revised down by 133,000 jobs, from 147,000 to just 14,000.
The Labor Department explained that “monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.”
The health care sector saw the most robust growth in July, adding 55,000 jobs, up from the average monthly gain of 42,000 over the past 12 months. More than half of the hirings were in ambulatory services, such as doctor’s offices and clinics.
Social assistance also enjoyed a relatively strong month, adding 18,000 jobs, but manufacturing fared worse, cutting 11,000 jobs. This comes after the sector shed a combined 26,000 jobs in May and June.
The federal government continued on its downward spiral, losing 12,000 jobs in July alone. Since January, this sector, which has been targeted by the U.S. Department of Government Efficiency (DOGE) formerly headed by Tesla billionaire Elon Musk, has shrunk by 84,000 jobs.