The U.S. labor market exhibited signs of weakness in July, with an unexpected loss of 23,000 jobs, raising doubts about the Federal Reserve's plans for interest rate hikes.

The likelihood of a Federal Reserve rate increase at its upcoming September meeting has fallen below 50% following this report.

By James Van Straten, Stephen Alpher | Edited by Stephen Alpher Updated Aug 7, 2026, 12:58 p.m. Published Aug 7, 2026, 12:31 p.m. 2 min read

  • The U.S. lost 23,000 jobs in July, and the previously reported job gain for June was revised down to just 20,000 from an initial 57,000.
  • Analysts had anticipated an addition of 80,000 jobs for July.
  • While stock and bond markets responded positively, the crypto sector remained largely unaffected.

According to the Nonfarm Payrolls Report released on Friday, the U.S. economy saw a decrease of 23,000 jobs in July, significantly lower than the projected increase of 80,000. Additionally, June’s job addition was revised to a mere 20,000.

May's figures were also adjusted, showing a decrease to 63,000 from an initial 129,000. The last time a negative job report was recorded was in February, with a loss of 156,000 jobs.

The unemployment rate improved slightly to 4.1%, better than the anticipated 4.2% and matching June's rate.

The market responded swiftly, with U.S. stock index futures rising and interest rates falling. Precious metals saw gains as well, with gold climbing by 3% and silver by almost 6%. In contrast, cryptocurrency markets showed little movement, with Bitcoin trading modestly higher at $65,000.

Other data from the jobs report indicated that average hourly earnings rose by only 0.1% in July, falling short of the expected 0.3% and the previous month’s 0.3% increase. Year-over-year earnings growth was recorded at 3.2%, below the anticipated 3.5% and June's 3.4%.

Prior to the report's release, market expectations were divided regarding a potential rate hike by the Fed in September. According to the CME FedWatch tool, interest rate traders had estimated a 55% chance of a rate increase. However, following the report, that probability has decreased to 46%.