WASHINGTON — The U.S. economy unexpectedly shed 23,000 jobs in July, the Labor Department reported on Friday, signaling a sharp slowdown in the labor market as employers faced weaker hiring.
Nonfarm payrolls fell by a seasonally adjusted 23,000 last month, compared with a revised gain of 20,000 in June. Economists had expected payrolls to increase by about 83,000.
The unemployment rate edged down to 4.1% from 4.2% in June, while the labor-force participation rate fell to 61.4%, its lowest level in more than five years, according to the Bureau of Labor Statistics.
The decline in payrolls was driven in large part by government employment, which fell by 53,000. Local government education jobs dropped by 50,000, while retail employment declined by 19,000 and financial activities fell by 14,000.
Private-sector employment, by contrast, increased by 30,000, although the gain was substantially weaker than in previous months.
The July figures followed significant downward revisions to earlier data. May payroll growth was revised to 63,000, down 66,000 from the previous estimate, while June's increase was revised lower by 37,000 to 20,000. The revisions brought the average monthly job gain over the past year to about 34,000.
Average hourly earnings increased at a slower pace, with the 12-month gain easing to 3.2%, according to the report.
The July employment figures are preliminary and subject to revision as the Bureau of Labor Statistics receives additional information.
