The U.S. economy added just 73,000 jobs in July 2025, continuing a three-month streak of subdued growth. The unemployment rate remained at 4.2%, with 7.2 million individuals unemployed. While healthcare and social assistance showed consistent hiring, broader labor market momentum stalled. Most notably, major downward revisions to May and June figures erased a combined 258,000 jobs, signaling a more pronounced slowdown than previously understood.

Key Highlights

July’s jobs report from the Bureau of Labor Statistics (BLS) shows a labor market losing steam, with fewer new positions, a rise in long-term unemployment, and a shrinking number of industries showing meaningful growth.

Here are some of the highlights:

• Unemployment held at 4.2%, with 7.2 million people unemployed.
• Long-term unemployment rose by 179,000 to 1.8 million, now accounting for 24.9% of all unemployed individuals.
• The labor force participation rate was stable at 62.2%, but has declined 0.5 percentage points over the year.
• The employment-population ratio was unchanged at 59.6%, down 0.4 points year-over-year.
• New labor force entrants increased by 275,000, suggesting more individuals are starting job searches.
• Discouraged workers dropped by 212,000 to 425,000, offsetting last month’s spike.

Sector Movement: Healthcare Steady, Government Mixed

While most sectors showed little to no movement, healthcare and social assistance continued to be the primary sources of job creation. Federal government employment, however, continued its contraction.

• Healthcare added 55,000 jobs, above its 12-month average. Ambulatory services (+34,000) and hospitals (+16,000) led growth.
• Social assistance added 18,000 jobs, including a 21,000-job gain in individual and family services.
• Federal government jobs declined by 12,000, bringing the total loss since January to 84,000.

Most major industries including construction, retail, professional services, and manufacturing remained flat.

Wages and Hours

• Average hourly earnings increased by $0.12 (0.3%) to $36.44, up 3.9% year-over-year.
• Nonsupervisory/production employees saw earnings rise by $0.08 (0.3%) to $31.34.
• The average workweek ticked up to 34.3 hours, with production workers averaging 33.7 hours.

Revisions: Major Downward Adjustments Signal Softness

• May’s job gains were revised down dramatically from +144,000 to +19,000 (–125,000).
• June’s were revised from +147,000 to +14,000 (–133,000).
• Combined, these revisions eliminate 258,000 jobs previously believed to be added, significantly altering recent trendlines.

Looking Ahead: Momentum Eroding Beneath the Surface

While headline numbers in July show moderate stability, the massive revisions to May and June expose underlying weakness in the labor market. Most sectors are stagnant, and job gains are being carried by a narrow group of service industries. Federal workforce reductions continue, and long-term unemployment is climbing again.

As hiring slows but layoffs remain contained, the data points to a “low hiring, low firing” environment, one where caution may overshadow confidence heading into the second half of the year.