US payrolls fall, unemployment drops, keeping Fed on hold

July jobs data pointed conflicting ways: payrolls unexpectedly fell 23,000, while unemployment dropped to 4.1%, likely prompting the Federal Reserve to hold rates in September. The Bureau of Labor Statistics revised May and June hiring lower, with June now 20,000. Average hourly wages rose 0.1% to $37.62, indicating moderate wage growth despite a falling unemployment rate. Analysts expect a September hold unless inflation surprises; odds of at least one hike before end-2026 exceed 75%. Falling labor-force participation, not strong hiring, drove the unemployment decline.