US labour market sheds jobs in July as labour force participation slumps

The United States labour market lost 23,000 jobs in July, with major declines across several sectors, including education, government and retail trade.

On Friday, the Bureau of Labor Statistics released its latest jobs report, which showed that the unemployment rate fell to 4.1 percent from 4.2 percent.

Part of that dip, however, was driven by a decline in labour force participation, the percentage of people working or actively looking for work.

Labour force participation fell to 61.4 percent, its lowest level in five years. Excluding the economic impacts of the COVID-19 pandemic, the labour force participation rate is at its lowest level in five decades.

Some 264,000 people left the labour force, meaning they are no longer working or looking for work.

The retail trade sector lost 19,000 jobs overall. Warehouse clubs and big-box retailers were hit the hardest, shedding 21,000 jobs, while petrol stations cut another 5,000. Those losses were partly offset by gains at stores selling more specialised goods, such as music and sporting goods stores, which added 10,000 jobs.

During the height of the normally busy summer travel season, the US economy also lost jobs in leisure and hospitality. The sector shed 40,000 jobs, with food services accounting for 26,000 of those losses.

The biggest losses came in government, which shed 53,000 jobs overall. Most of those cuts were in local education, which lost 49,000 jobs.