US Employment Report (NFP) – July 2026 The US economy lost 23,000 jobs in July, contrary to market expectations, while 80,000 new jobs were expected to be created. Report details Non-Farm Payrolls Real: 23 thousand jobs Forecast: 80 thousand+ jobs Last month's data: 57 thousand+ jobs Revision of previous months' statistics The total revision of the last two months: 103,000 fewer jobs May statistics of 129 thousand jobs were revised. unemployment rate Real: 4.1% Forecast: 4.2% Previous month: 4.2% This sector was better than expected and shows that the unemployment rate has decreased contrary to forecasts. Labor force participation rate Actual: 61.4% Previous month: 61.5% A slight decrease in the participation rate can be one of the reasons for the lower unemployment rate. Wages Monthly growth of hourly wages Actual: 0.1% Forecast: 0.3% Annual growth in hourly wages Real: 3.2% Forecast: 3.5% This segment was significantly lower than expected, indicating that wage pressures are easing; An issue that is in favor of the Federal Reserve from the point of view of inflation. Other details Private sector employment: 30,000+ (forecast: 78,000+) Production sector employment: 30,000+ (forecast: 4,000+) Public sector employment: -53 thousand (previous month: +8 thousand) Average weekly working hours: 34.3 hours (as expected) Initial market reaction Before publishing the report: The USD/JPY rate was in the range of 158.33. The market had priced a 57% chance of the Federal Reserve raising interest rates at the September meeting. summary At first glance, the headline of the report seems to be very weak, as the US economy has experienced an unexpected decline in employment. But the details paint a different picture: Negative points Non-agricultural employment was much weaker than expected. Significant negative revision in previous months' statistics. Wage growth was lower than expected. Positive points The unemployment rate decreased to 4.1 percent. The production sector performed better than expected. Most of the decline in employment came from a 53,000 drop in government employment, not widespread weakness in the private sector. Consequences for monetary policy Overall, the report tends to reduce expectations for interest rate hikes because: Employment growth has been weak. Wage pressure has decreased. However, the market will still be waiting for next week's US inflation (CPI) report, as the Fed's decisions are more dependent on the inflation trend than the labor market.
