Total nonfarm payroll employment changed little in July, increasing by an anemic 73,000 jobs—well below the consensus forecast of a 110,000 gain—while the unemployment rate held at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. 

Adding to the disappointment, BLS revised May’s job gains downward by 125,000 (from +144,000 to +19,000) and June’s figures down by 133,000 (from +147,000 to +14,000), leaving the combined employment for those two months 258,000 lower than initially reported.

In comparison, annual benchmark revisions to total non-farm employment have averaged just 0.1 percent over the past decade, highlighting how unusually large these mid-year cuts are.

For July, average hourly earnings for private‐sector workers rose 12 cents, or 0.3 percent, to $36.44, matching the 0.3 percent increase in the Personal Consumption Expenditures price index in June—effectively holding real wages flat month-to-month. 

The average workweek edged up 0.1 hour to 34.3 hours, while the labor force participation rate dipped 0.1 percentage point to 62.2 percent, with discouraged workers down by 212,000 to 425,000—a sign some marginally attached Americans may be returning to the job hunt.

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Construction Unemployment Low in June as Economists Remain Cautious

Employment gains were heavily skewed toward services, while goods-producing sectors were mixed: manufacturing shed 11,000 positions and construction tacked on a scant 2,000 jobs. Health care added 55,000 jobs and social assistance added 18,000 jobs; leisure and hospitality showed little change, according to the BLS. 

Economists and policymakers seized on the soft headline and steep downward revisions as evidence that the Federal Reserve may delay cutting interest rates. 

“The door to a Fed rate cut in September just got opened a crack wider,” Christopher Rupkey, chief economist at FWDBONDS told Reuters. Two Fed governors—Michelle Bowman and Christopher Waller—had dissented at this week’s policy meeting, largely over labor-market concerns. Bowman argued the Fed should have begun “gradually moving our moderately restrictive policy stance toward a neutral setting.” At the same time, Waller said the “wait-and-see approach is overly cautious and could lead to policy falling behind the curve,” according to Fed minutes of the meeting. 

Total nonfarm payroll employment changed little in July (+73,000) and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported today. The unemployment rate, at 4.2 percent, also changed little in July. Employment continued to trend up in health care and in social assistance. The federal government continued to lose jobs. 

Construction Employment Sputters

Construction employment remains an outlier in its weakness. After adding just 2,000 jobs in July, industrywide employment has climbed only 96,000 over the past year—an increase slightly above one percent.

“The construction industry has added just 7,000 jobs over the past four months,” Associated Builders and Contractors' Chief Economist Anirban Basu said in a statement. “Industrywide employment is up only 1.2 percent over the past year, a lackluster pace of growth that historically is seen during and immediately following recessions. Given that ABC member backlog remains healthy and hiring expectations remain relatively optimistic, according to ABC’s Construction Backlog Indicator, it’s possible that weakness will be confined to the residential side of the industry during the second half of 2025.”

Nonresidential Spending Contracts

ABC also released its analysis of Census Bureau spending data, showing national nonresidential construction outlays fell 0.1 percent in June to a seasonally adjusted annual rate of $1.241 trillion, marking six monthly contractions in the past seven. 

“Recent declines would be worse if not for ongoing increases in public nonresidential spending, which has risen 5.1 percent over the past year, significantly outperforming the 4.0 percent annual decline in private nonresidential activity,” Basu noted. “While ABC members remain optimistic about the second half of the year, recent data suggest weakness could persist in the months to come.”