U.S. employers added 73,000 jobs in July, well below economists’ forecasts of roughly 110,000 to 115,000, the Labor Department said on Friday. The unemployment rate edged up to 4.2%, matching expectations, while average hourly earnings increased 0.3% on the month and 3.9% from a year earlier. Total nonfarm payroll employment now stands at 159.5 million. The Bureau of Labor Statistics also lowered its estimates for the prior two months by a combined 258,000 positions, marking the steepest two-month downward revision since at least 1979 outside the pandemic period. The bulk of the reduction erased a previously reported jump in state and local government hiring, suggesting the labor market has been cooling for longer than headline figures indicated. Economists at Goldman Sachs noted that most of the adjustment reflected weaker underlying employment rather than seasonal-factor changes and was split roughly evenly between public and private sectors. The bank projects the forthcoming annual benchmark revision—due 9 September—to trim an additional 550,000 to 950,000 jobs from the March 2025 payroll total, which would further temper assessments of labor-market momentum ahead of the Federal Reserve’s next policy meeting.