Jobs report July 2025:

Nonfarm payroll growth was slower than expected in July and the unemployment rate ticked higher, raising potential trouble signs for the U.S. labor market.

Job growth totaled 73,000 for the month, above the June total of 14,000 but below even the meager Dow Jones estimate for a gain of 100,000. June and May totals were revised sharply lower, down by a combined 258,000 from previously announced levels.

At the same time, the unemployment rate rose to 4.2%, in line with the forecast.

The June total came down from the previously stated 147,000, while the May count fell to just 19,000, revised down by 125,000.

Stock market futures fell further after the news while Treasury yields also were sharply lower.

The weak jobs report, including the dramatic revisions, could provide incentive for the Federal Reserve to lower interest rates when it next meets in September. Following the report, futures traders raised the odds of a cut at the meeting to 63%, up from 40% on Thursday.

“Today’s report adds weight to signs of a slow but persistent cooling trend. While the labor market is not in crisis, hiring momentum continues to soften, and pressures are beginning to build,” said Ger Doyle, North America regional president at Manpower Group.

There were few signs of strength in the July jobs count, with gains coming primarily from health care, a sector that has continued to show strength in the post-Covid recovery. The group added 55,000 jobs, easily leading the way. Social assistance also contributed 18,000 jobs.

However, federal government employment continued to decline, down 12,000 or the month and 84,000 since its January peak, before Elon Musk’s Department of Government Efficiency began paring down the jobs rolls.

On wages, average hourly earnings increased 0.3%, meeting the estimate, though the yearly gain of 3.9% was slightly higher than expected.

The household survey, which is used to compile the unemployment rate, was even worse than the establishment survey of total payrolls gains. That showed a decline of 260,000 workers, with the participation rate edging down to 62.2%, the lowest since November 2022.

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