US jobs fall by 23,000 as jobless rate slips to 4.1%

The United States lost 23,000 jobs in July, while the unemployment rate ticked down to 4.1%, government data showed on Friday.

The US Bureau of Labor Statistics also revised job growth in the previous two months down by 103,000, showing a weaker labour market than earlier figures had suggested.

Economists polled by Dow Jones Newswires and The Wall Street Journal had expected 83,000 jobs to be added in July.

Employment declined in local government education and retail trade, while health care continued to add jobs. Local government education lost 50,000 jobs, retail trade lost 19,000 and financial activities lost 14,000. Health care added 22,000 jobs, but at a slower pace than its average gain over the past year.

Average hourly earnings rose 3.2% from a year earlier, lagging inflation. The labour force participation rate also edged down in July after a larger decline the previous month.

The report could complicate the Federal Reserve's interest-rate decisions. The Fed held rates steady last month, although three regional Fed presidents dissented in favour of a rate hike.

Chris Zaccarelli of Northlight Asset Management said the report was a “game changer” because it showed labour market risks at a time when attention had been focused on inflation.

The jobs data also came as President Donald Trump has promoted his economic policies and Republicans prepare for November midterm elections, with the economy a key issue for Democrats seeking to regain control of Congress.