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The labor market showed signs of weakening, as job gains for the previous two months were also revised lower.
Aug. 1, 2025Updated 9:08 a.m. ET
Employers continued to create jobs but pulled back on hiring, a sign that more businesses are putting expansion plans on hold as they deal with economic uncertainty created by President Trump.
The economy added 73,000 jobs last month, the Labor Department reported on Friday, lower than economists’ expectations. The unemployment rate slightly rose to 4.2 percent, up from 4.1 percent the month before.
In a sign that the labor market may not have been as robust as it seemed earlier this year, job gains from the previous two months were also revised down by a total of 258,000, an unusually high number.
The labor market has so far continued to hold up this year. But the slower growth in payrolls signal that cracks in the job market are deepening. Economists have warned that chaotic tariff policies, immigration restrictions and job losses in the federal government could further dampen growth.
“I think we’re looking at a labor market that’s not absolutely falling off a cliff, but it’s getting materially weaker,” said Oliver Allen, a senior U.S. economist at Pantheon Macroeconomics.
Employers added fewer jobs in July than expected, reflecting a labor market that has been cooling this year as high interest rates have weighed on businesses. Last year, the economy added an average of about 168,000 jobs each month.
