In July, U.S. employers cut 23,000 jobs, with previous months’ figures revised downward by 103,000 due to labor shortages, as per the Bureau of Labor Statistics. Mark Zandi, chief economist at Moody’s Analytics, highlighted the grim outlook, stating in a social media post that job growth has nearly halted. Inflation’s effects are evident with a 21,000 job decrease in general merchandise retail and 5,000 in gas stations. The financial sector saw a 14,000 job reduction, continuing a decline of 121,000 since its peak in May 2025.
Healthcare jobs increased by 22,000 but fell short of the 36,000 monthly average seen in the past year. Revised numbers for May and June showed 66,000 and 37,000 fewer jobs respectively, despite the World Cup’s employment boost. The adjusted figures are now 63,000 for May and 20,000 for June.
Small businesses experienced a significant labor market tightening in July, according to a report by the National Federation of Independent Business (NFIB). In a survey, 27% of its members identified labor supply and quality as their main challenge, a jump from 19% in June and the 12% historical average. Health insurance costs also emerged as a major concern, particularly in Texas, where nearly 15% of NFIB members cited it as the top issue compared to about 10% nationally. Texas remains one of the 10 states not expanding Medicaid under the Affordable Care Act.
NFIB State Director Jeff Burdett emphasized the widespread concern over health insurance costs, stating, “I have yet to have a conversation with anyone who doesn’t think this is a problem and in most cases it’s their biggest problem.” Nationwide, many small businesses struggle to afford health insurance, leading to a talent drain to larger firms. Burdett noted, “They want to provide health insurance, they need to provide it to be competitive, it’s just cost prohibitive.”
An ADP employment report also highlighted labor market constraints, with job changers experiencing the fastest pay growth in a year. ADP’s chief economist, Nela Richardson, indicated that this reflects supply constraints in parts of the labor market.
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