US Job Growth Turns Negative as Payrolls Shrink Unexpectedly

The latest US jobs report delivered a surprising blow to markets, showing the economy actually lost jobs last month instead of adding them, even as the unemployment rate ticked down slightly.

Payrolls Fall Well Short of Expectations

Non-farm employment change came in at negative 23,000 for the month, a sharp miss compared to the forecast of 85,000 new jobs and a steep drop from the previous month’s revised figure of 57,000. This marks a significant shift in labor market momentum, with the economy shedding jobs rather than adding to the workforce as expected.

Wage Growth Slows Down

Average hourly earnings rose just 0.1% month-over-month, missing the forecast of 0.3% and falling below the previous reading of 0.3% as well. The slowdown in wage growth suggests employers are pulling back on pay increases as hiring cools.

Unemployment Rate Ticks Lower

Despite the weak jobs numbers, the unemployment rate actually came in slightly better than expected at 4.1%, below both the forecast and previous reading of 4.2%. The combination of falling payrolls alongside a lower unemployment rate points to a labor market that may be cooling from multiple directions at once, a pattern that tends to draw close attention from policymakers weighing future interest rate decisions.