The U.S. labor market lost momentum in July, with the Bureau of Labor Statistics reporting just 73,000 new non-farm jobs—well below the roughly 104,000 positions economists had forecast. Total payroll employment stood at 159.5 million. The unemployment rate edged up to 4.2%, matching expectations and marking a further increase from 4.1% in June. Average hourly earnings rose 0.3% on the month and 3.9% from a year earlier, while the labour-force participation rate slipped to 62.2% from 62.3%. Wage growth remains solid, but the slower pace of hiring suggests demand for workers is cooling. The BLS also delivered the steepest downward revisions since the pandemic, subtracting a combined 258,000 jobs from May and June estimates. June payrolls were cut to a gain of just 14,000, and May’s figures were also revised sharply lower, reshaping the recent employment trend. Additional data point to softer labour demand. Job-openings fell by 275,000 in June to 7.4 million, and hires declined by 261,000 to 5.2 million, according to the latest Job Openings and Labor Turnover Survey. Financial markets interpreted the report as confirmation that economic activity is cooling. The yield on the 10-year Treasury dropped about 16 basis points and the dollar index fell roughly 1.3%, as investors increased bets that the Federal Reserve may soon need to ease policy to support growth.