US Job Growth Slowdown July 2025: Unemployment Rate Climbs to 4.2%

Intermediate | August 6, 2025

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US Job Growth Slowdown July 2025 Hits a Snag

July 2025 Sees Unexpected Slowdown

The U.S. labor market experienced a significant US job growth slowdown July 2025. The economy added only 73,000 jobs, far below the 100,000 to 115,000 economists expected. Consequently, the national unemployment rate increased to 4.2% from 4.1% in June, marking the third consecutive month of sluggish growth. Official revisions further reduced May and June payrolls by 258,000 combined jobs, pushing the three-month average gain down to a “troublingly low” 35,000. Additionally, long-term unemployment significantly increased, affecting 1.8 million people.

Sector Performance Varied

Despite the overall trend, some sectors still saw job growth. Healthcare and social assistance, for example, added 55,000 and 18,000 positions respectively. These industries often grow even when the broader economy struggles. Conversely, manufacturing lost 11,000 jobs for its third consecutive monthly decline. The federal government also shed 12,000 jobs, and administration and support services, along with other goods-producing industries, also saw declines.

Reasons for the Dip and Future Outlook

Trade Policies and Fed’s Next Move

Many observers largely attribute this weak jobs report to President Donald Trump’s “erratic and radical trade policies” and widespread tariffs. They argue these policies are paralyzing businesses and creating uncertainty about the economic future. Therefore, this disappointing data increases expectations for the Federal Reserve to cut interest rates at its next meeting in September. The report highlights concerns that two Fed governors had previously voiced.

Official and Market Reactions

President Trump reacted strongly, publicly calling for the firing of the Labor Department’s Bureau of Labor Statistics director, accusing her of manipulating figures. U.S. markets initially recoiled, with the Dow tumbling over 600 points on the day of the release, though stocks later recovered some losses. While the national unemployment rate climbed, local areas like the Washington, D.C. metro region also saw an uptick to 5%, contrasting with South Dakota’s consistently low rate of 1.8% in June.

Vocabulary

Slowdown (noun): A decrease in speed or activity.
- Example: “The recent economic slowdown has affected many industries.”
Unemployment rate (noun phrase): The percentage of the total labor force that is unemployed but actively seeking employment and willing to work.
- Example: “The country’s unemployment rate rose last month, causing concern.”
Sluggish (adjective): Slow-moving or inactive.
- Example: “After a long week, I feel a bit sluggish on Sunday mornings.”
Revisions (noun): Changes or corrections made to something previously published or stated.
- Example: “The company made some revisions to its financial report.”
Troublingly (adverb): In a way that causes worry or anxiety.
- Example: “The number of new cases is troublingly high this week.”
Shed (verb): To lose or get rid of something.
- Example: “The company plans to shed about 50 jobs next quarter.”
Erratic (adjective): Not regular or consistent in movement, pattern, or behavior; unpredictable.
- Example: “His erratic driving worried the other passengers.”
Paralyzing (verb): Making something unable to function or move.
- Example: “The heavy snow storm was paralyzing traffic in the city.”
Recoil (verb): To suddenly spring or flinch back in fear, horror, or disgust; to react strongly and negatively.
- Example: “Investors recoiled at the news of the company’s bankruptcy.”
Tumbling (verb): Falling rapidly or uncontrollably.
- Example: “The stock market started tumbling after the negative report.”

Discussion Questions (About the Article)

What was the main economic news in the U.S. for July 2025?
Which specific sectors of the economy showed job gains, and why are they considered unique?
According to the article, what is the primary reason for the weak jobs report?
How did Wall Street react to the disappointing jobs data?
What action did President Trump take in response to the jobs report?

Discussion Questions (About the Topic)

How might a rising unemployment rate affect the average person or family?
Do you think trade policies can significantly impact a country’s job market? Why or why not?
What role do you think a central bank, like the Federal Reserve, plays in managing the economy?
How do you usually get news about the economy, and why is it important to stay informed?
What are some ways a government could try to encourage job growth during an economic slowdown?

Related Idiom

Tighten your belt

Meaning: To spend less money and live more frugally, especially during a difficult period.
Example: “With the recent job growth slowdown, many families might need to tighten their belts and save more.”

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This article was inspired by: The Wall Street Journal, August 1, 2025