The US economy added 73,000 jobs in July, far lower than expected, amid ongoing concerns with Donald Trump’s escalating trade war.
Forecasters surveyed by Bloomberg had predicted the July jobs report would show a drop in added jobs of around 109,000. The unemployment rate rose to 4.2% from 4.1% in June.
The Bureau of Labor also slashed the number of jobs added in recent months. May’s jobs figure was revised down by 125,000, from 144,000 to 19,000, and June was revised down by 133,000, from 147,000 to 14,000 – a combined 258,000 fewer jobs than previously reported.
The ADP National Employment report, released on 30 July, noted private sector employment increased by 104,000 jobs in July 2025, fueled by gains in service industries.
“There clearly is not any sort of collapse of the labor market, which would be apparent in weekly unemployment claims, but we are seeing signs of a weakening labor market,” wrote Dean Baker, co-director of the Centre for Economic and Policy Research, in a post ahead of the release of the July jobs report.
The jobs report comes in a week packed with economic news. On Wednesday, the Bureau of Economic Analysis reported that gross domestic product, a broad measure of the US’s economic health, grew at 3% in the last three months, up from a 0.5% decline in the first quarter.
The first quarter fall and second quarter bounceback were driven by Trump’s tariff policies as businesses stocked up on imports ahead of the levies at the start of the year – which cut growth – and cut back on imports in the second – which boosted growth.
Taken together, the US economy grew at a sluggish 1.2% in the first six months of the year, down from the 2.5% average pace in 2024.
Also on Wednesday, the Federal Reserve announced it would not cut interest rates. The Fed is under intense pressure from Trump to cut rates but Fed chair Jerome Powell said the central bank is still waiting to see what impact Trump’s tariffs will have on prices.
“Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen,” Powell said.