U.S. employers unexpectedly cut 23,000 jobs in July, and Labor Department revisions shaved 103,000 jobs off payrolls in May and June. The unemployment rate fell to 4.1% only because 264,000 Americans left the labor force, pushing participation down to 61.4%, the lowest since February 2021. Local public schools cut 50,000 jobs, restaurants and bars 26,000, retailers 19,000, while construction gained 22,000 jobs and factories 5,000. So far this year, employers are adding an average of 61,000 jobs per month, up from just 9,700 in 2025, but the threshold needed to keep unemployment stable has dropped to near zero due to reduced labor supply from immigration crackdowns and baby-boomer retirements.
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