Updated on Aug. 7.
July hiring falls short of expectations
Unemployment was 4.1% in July, down 0.1 percentage point from June, according to the July jobs report released by the Bureau of Labor Statistics on Aug. 7.
Total employment fell by 23,000, compared to a 20,000 increase in June and a 63,000 increase in May. The gains in July were well below forecasts of 83,000.
Another worrying sign remains: Similar to June, long-term unemployment affected 1.8 million jobseekers in July. Those who have been jobless for 27 weeks or more comprise 25.5% of all those unemployed.
Job gains:
- Health care (+22,000)
- Sporting goods, hobby, musical instrument, book, and miscellaneous retailers (+10,000)
Job declines:
- Local government education (-50,000)
- Retail trade (-19,000)
- Financial activities (-14,000)
- Warehouse clubs, supercenters, and other general merchandise retailers (-21,000)
- Gasoline stations and fuel dealers (-5,000)
What are the weekly jobless claims?
Initial jobless claims went up for the week ending Aug. 1, according to the report released on Aug. 6.
Why it matters: The weekly jobless claims, or initial claims, are the number of unemployment insurance claims filed in the past week. They provide an indicator of the strength — or weakness — of the labor market.
Learn more about this week's jobless claims
Jobless claims were 199,000 for the week ending Aug. 1, up by 1,000 from the previous week’s revised level of 198,000.
The new four-week moving average — a measurement of the number of people who filed for unemployment insurance for the first time over the last four weeks — was 198,750, down by 4,500 from the previous week's revised average of 203,250.
What's the insured unemployment rate?
Not all types of unemployment are included as part of the insured unemployment rate. It only includes "covered unemployment," as in people who receive unemployment benefits. Those who quit their jobs, for example, aren't included in the insured unemployment rate because they aren't eligible for unemployment benefits.
The advance seasonally adjusted insured unemployment rate — the rate of continuous covered unemployment claims divided by covered employment — was 1.2% for the week ending July 25, unchanged from the previous week’s unrevised rate.
Job openings change little in June
There were 7.4 million job openings in June, down slightly from May, according to the latest Job Openings and Labor Turnover Summary (JOLTS), released on Aug. 4.
Here’s what NerdWallet senior economist Elizabeth Renter had to say about the report:
Movement in the job market was subdued yet again in June, as the rates of hiring and quits budged just slightly upward. For job seekers, this labor market lull likely looks a bit depressing, but there is little cause for alarm from a macro perspective.
The labor market seems to be in a holding pattern. It’s moving at a steady pace — not hitting the gas or the brakes. And as long as this pattern continues, it will continue to support economic growth despite not being particularly inviting to people seeking a new job.
The experience for workers varies by industry, of course, as some sectors are more or less dynamic than others. Those in government and finance, for example, are in a particularly tight spot, as there is very little hiring in these sectors.
This data is on a pretty significant lag, looking back to June. During the week, we’ll get more recent reads on the labor market as we get data from ADP’s private sector report tomorrow and the jobs report on Friday.
The unemployment rate decreased by 0.1 percentage point in July to 4.1%, compared to June, according to the July jobs report released on Aug. 7 by the Bureau of Labor Statistics (BLS).
Here’s what NerdWallet senior economist Elizabeth Renter had to say about the report:
This early data suggests the U.S. economy shed jobs last month, and growth in the prior two months was far less robust than initially estimated. This isn’t great news, especially when looked at alongside the high inflation we’re experiencing. But it’s still likely that this data supports the verdict that we’re living with a stable but sluggish labor market.
Losses in local education helped drag down the headline employment figure. This sector is vulnerable to seasonal issues, though. Prior to the pandemic and to a lesser extent since, such losses were not uncommon in the summer months before being undone in the months that follow, even after statistically adjusting for seasonal differences.
Puzzling losses in leisure and hospitality persisted for the second month, however. This could be due to overhiring in the months leading up to traditionally busy months and seasonal adjustment factors. When the BLS applies seasonal adjustment methods to data in a year where things are a bit different, it can paint a misleading picture.
This jobs report may look a little sketchy, but taken together with everything we know about the current labor market it’s not cause for panic. Current conditions certainly aren’t welcoming to job seekers, but this data may be overstating things.
That said, the data doesn’t make things any easier for the Fed, who are looking for a clear picture on where the risks are biggest: inflation or the labor market. Next week’s economic data will help guide their next meeting, but they’ll likely still be left with opaqueness and having to make best-guess decisions.
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What is the current unemployment rate?
The current unemployment rate is 4.1% for July, compared to June (4.2%).
The unemployment rate has risen since hitting a 50-year low of 3.4% in April 2023. Since May 2024, the unemployment rate has mostly stayed between 4% and 4.2%.
How the unemployment rate is calculated
The unemployment rate is calculated by dividing the number of unemployed people by the number of people in the labor force. (The labor force is considered the sum of those who are currently working or looking for work.) The result is then multiplied by 100 to get a percentage:
Number of unemployed people / Labor force x 100 = X%, which is the unemployment rate
Will unemployment go up soon?
The labor market showed signs of weakening throughout 2025 and that trend has continued into 2026.
The recent rise in unemployment was a byproduct of monetary policymakers’ effort to curb inflation by hiking interest rates. The Federal Reserve raised the federal funds rate 11 times between March 2022 and July 2023. Now that inflation is consistently slowing, the Fed has taken steps to prevent unemployment from rising further.
The Fed cut rates in 2024 at its September, November and December meetings. It paused rates at every meeting so far in 2025, but has indicated that there could be some rate cuts in 2025.
The Fed cut rates three times in 2025 before pausing in January. It also paused rates in March and April.
» MORE: What is the minimum wage?
Are wages increasing?
Wage growth is lower than it was a year ago and now closer to pre-pandemic levels, according to data from the Federal Reserve Bank of Atlanta. The three-month moving average of median hourly wage growth — when measured over the previous 12 months — has slowed from its peak in the summer of 2022.
For June, the three-month wage growth percent change was 3.8%, unchanged from May.
What does the Employment Cost Index show?
Increases in compensation costs in the second quarter of 2026 matched the last quarter of 2025 but were slower than a year ago, according to the most recent quarterly BLS Employment Cost Index, which measures wage and salary growth. Wages and salaries, as well as benefits, comprise total compensation costs.
The June 2026 report, released on July 31, shows compensation costs increased by 0.9% in the second quarter of 2026.
Year-over-year measurements show that compensation cost increases held steady in Q2 2026 (3.4%), matching the pace of the first quarter of 2026, but slower than the rates seen throughout 2024.
- Q2 2026: 3.4%
- Q1 2026: 3.4%
- Q4 2025: 3.4%
- Q3 2025: 3.6%
- Q2 2025: 3.6%
- Q1 2025: 3.6%
- Q4 2024: 3.8%
- Q3 2024: 3.9%
- Q2 2024: 4.0%
- Q1 2024: 4.2%
For the 12-month period ending in June 2026, wages and salaries increased 3.1%, compared to 3.5% for the 12-month period ending in March 2026.
Benefit costs had matched the increase in the 12-month period ending in June (3.8%) compared to the 12-month period ending in March 2026.
More key jobs data and what it means
What happened in July?
The economy fell by 23,000 jobs in July, according to the BLS, while economists had expected greater gains. Revisions also show job growth was weaker than previously reported in both May and June. Here’s how many jobs were added in previous months.
- 20,000 in June.
- 63,000 in May.
- 148,000 in April.
- 214,000 in March.
- -156,000 in February.
- 160,000 in January.
- 48,000 in December.
- 41,000 in November.
- -173,000 in October.
- 119,000 in September.
- -4,000 in August 2025.
- 72,000 in July 2025.
What is the labor force participation rate?
The labor force participation rate went down by 0.1 percentage point from June (61.5%) to June (61.4%), according to the Bureau of Labor Statistics.
Why it matters: The labor force participation rate is the percentage of the population that is working or looking for work.
The rate is calculated as the labor force divided by the total population that’s eligible to work. (The Bureau of Labor Statistics defines the total population that’s eligible to work as the “civilian noninstitutional population,” which refers to people ages 16 and older who are not in military service or incarcerated.) The result is multiplied by 100 to get a percentage:
Labor force / Civilian noninstitutional population x 100 = X%, which is the labor force participation rate
Since October 2002, the labor force participation rate was lowest in April 2020 (60.1%) and highest in June 2003 (66.5%), according to BLS data.
How many job openings were there in June?
The latest Job Openings and Labor Turnover Summary (JOLTS), released on Aug. 4, shows job openings were 7.4 million in June compared to:
- 7.6 million in May
- 7.6 million in April
- 6.9 million in March
- 6.9 million in February
- 7.2 million in January 2026
- 6.6 million in December 2025
- 6.9 million in November 2025
- 7.4 million in October 2025
- 7.7 million in September 2025
- 7.2 million in August 2025
- 7.2 million in July 2025
- 7.4 million in June 2025
- 7.7 million in May 2025
The seasonally adjusted job openings rate was 4.4% in June, down slightly from May. The job openings rate in June 2025 was 4.3%.
The number of job openings rose in transportation, warehousing, and utilities (+97,000) and in federal government (+39,000).
What is the layoff rate?
The rate of layoffs in June (1.1%) was unchanged from May, according to the most recent JOLTS report.
Layoffs changed little in all industries.
What is the quit rate?
The JOLTS report also shows the quit rate in June was 2.0%, up slightly from May. Quits decreased in the federal government (-4,000).
Why it matters: Economists say quit rates are a key factor in the health of employment prospects since quitting shows that workers feel safe making a job switch within their sector or outside it entirely.
The current quit rate is slightly below pre-pandemic levels after peaking at 3% in both Nov. 2021 and April 2022.
When is the next jobs report?
The next jobs report will show data for August and it will be released on Sept. 4.
(Photo by Spencer Platt/Getty Images News via Getty Images)
