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Is US headed for recession? July job report sparks concern as unemployment rises
The US economy added just 73,000 jobs in July 2025 and the unemployment rate increased to 4.2 per cent from 4.1 per cent in June.
The jobs report for the month of July 2025 has come in as a major shocker for the US economy, amid growing concerns over President Donald Trump's escalating trade war. On Friday, the data from the Bureau of Labor Statistics (BLS) highlighted that a mere 73,000 jobs were added last month, far lower than expected, The Guardian reported. The unemployment rate in the world's largest economy has jumped to 4.2 per cent from 4.1 per cent in June 2025.
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Steep decline in job market: US headed for recession?
"To me, today’s jobs report is what entering a recession looks like," USA Today quoted Josh Bivens, chief economist of the Economic Policy Institute, as saying. A big change highlighted in the report was that the department overestimated job gains in the months of May and June.
For May 2025, the jobs figure has been revised down by 125,000 and reached 19,000 from 144,000 earlier. On the other hand, the June 2025 figure has been revised by 133,000, from 147,000 to 14,000.
Altogether, this represents 258,000 fewer jobs than what was earlier reported. According to CNBC, Heather Long, chief economist at Navy Federal Credit Union, has termed it a “gamechanger jobs report,” since the labor market is “deteriorating quickly.”
This comes amid the sweeping import tariffs from the Donald Trump administration as well as the intensifying immigration crackdown and federal layoffs. As per USA Today, the job gains in the country have averaged just 35,000 in the last three months.
The BLS data could provide an incentive for the Federal Reserve to think about slashing the interest rates during its September meeting. Futures traders have already raised the odds of a cut to 75.5 per cent from 40 per cent on Thursday, CME Group data shows.
Luke Tilley, chief economist at Wilmington Trust, said this is the “slowdown” that the experts had been expecting because firms are facing a “very different cost structure.” “They need to adapt to a new cost structure, which means holding off on hiring,” CNBC quoted Tilley as saying.
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In July, gains majorly came in from the health care sector, which has been gaining strength post the COVID-19 pandemic period. It added roughly 55,000 jobs. Social assistance, meanwhile, contributed 18,000 jobs, with the two sectors accounting for about 94 per cent of the job growth.
On the other hand, the retail sector added about 16,000 jobs and 15,000 were seen in the financial sector. What remains a matter of concern is that federal government jobs continue to decline. Nearly 12,000 federal jobs were eased out in July, and employment is down by 84,000 since it reached the peak in January this year.
FAQs:
What time is the jobs report today?
The Bureau of Labor Statistics releases the report at 8:30 AM ET on the first Friday of every month.
What is included in the jobs report?
The report tells people how many jobs the US economy created in the previous month, besides the unemployment rate and other details.
Did the US lose 33,000 jobs in June?
The ADP report shows that private payrolls lost 33,000 jobs in the month of June.
