US labour market shrinks as economy loses 23,000 jobs in July

The US economy unexpectedly lost 23,000 jobs in July, signalling a further slowdown in hiring as employers faced growing economic uncertainty, according to new data from the Bureau of Labor Statistics.

The unemployment rate fell to 4.1 percent from 4.2 percent, largely because more people left the labour force.

CNN reported that economists had expected the economy to add about 95,000 jobs during the month.

The latest figures also included sharp downward revisions to previous reports. June's employment gains were revised to 20,000 from 57,000, while May's total was cut to 66,000 from 129,000.

Healthcare and social assistance remained the strongest-performing sector, adding about 22,600 jobs.

However, losses in local government and the leisure and hospitality sectors outweighed those gains, with 57,000 and 40,000 jobs lost respectively.

Wage growth also slowed. Average hourly earnings increased by just 0.1 percent from June, bringing annual wage growth down to 3.2 percent, the lowest level in five years.

"Price volatility may be contributing to increased hesitation from employers," ZipRecruiter labour economist Nicole Bachaud told CNN.

"With job opportunities remaining scarce, more workers are exiting the labor market entirely."

According to CNN, expectations of a US Federal Reserve interest rate increase in September also declined.