US job growth turns negative in July, prior months revised lower

The US economy unexpectedly lost 23,000 jobs in July, and prior months were revised down sharply, lowering odds of a Federal Reserve rate hike next month. The unemployment rate fell to 4.1% from 4.2% only because 264,000 people left the labor force; participation hit 61.4%. Payroll declines centered in local government education, while leisure and hospitality lost jobs for a second month. Economists called the weakness a seasonal quirk, not deterioration; averages over three months were 20,000. Markets saw a 43.9% chance of a September hike, down from 57% before the report.