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US Employers Cut 23,000 Jobs in July as Small Businesses Strain Under High Costs
U.S. employers shed 23,000 jobs in July, and the employment count for earlier months was revised downward by 103,000 jobs as labor shortages begin to weigh on hiring, according to new statistics released Friday by the federal Bureau of Labor…
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Key points
- U.S. employers shed 23,000 jobs in July, with May and June job growth revised downward by a combined 103,000 positions.
- Over 27% of small business owners cite labor shortages and candidate quality as their top concern, according to the NFIB.
- Retail and financial sectors led job cuts as inflation and rising health insurance expenses weigh heavily on employer budgets.
Labor Market Stalls Under Inflationary Pressures
NewsWK — American employers cut 23,000 jobs in July while federal authorities significantly revised previous employment figures downward, signalling growing economic strains across the country. According to U.S. Bureau of Labor Statistics figures first reported by Stateline, employment totals for May and June were slashed by a combined 103,000 jobs.
Revised federal figures show May added only 63,000 jobs after a 66,000-job reduction, and June added just 20,000 jobs following a 37,000-job downward adjustment.
“There’s no sugarcoating the overarching message in the July jobs report,” said Mark Zandi, chief economist at Moody’s Analytics, as reported by Stateline. “The economy is struggling. Job growth is at a virtual standstill.”
Main Street Struggles With Worker Shortages and Insurance Costs
The sluggish labor growth coincides with mounting pressures on small business owners nationwide. Data from the National Federation of Independent Business (NFIB), which represents 300,000 independent business owners, revealed that 27% of surveyed members identified labor supply and worker quality as their primary operational issue in July. That figure is up from 19% in June and stands significantly higher than the 12% historical average.
High overhead costs, particularly for employee health benefits, further hamper small firms attempting to compete with corporate giants. In Texas, nearly 15% of small business owners surveyed by NFIB reported health insurance expenses as their single largest challenge, exceeding the national average of 10%.
“They want to provide health insurance, they need to provide it to be competitive, it’s just cost prohibitive,” NFIB Texas State Director Jeff Burdett told Stateline. “What that means is that talented workers are bypassing small businesses entirely in favor of large employers.”
Retail, Finance, and Service Sectors Cut Headcount
Job cuts were widespread across key commercial sectors. General merchandise retailers shed 21,000 jobs in July, while gasoline stations reduced payrolls by 5,000 positions. Financial services dropped 14,000 jobs, continuing a downturn that has eliminated 121,000 industry positions since May 2025.
Health care added 22,000 positions during July, though that fell below its 12-month average of 36,000 new jobs per month. Meanwhile, payroll processing firm ADP reported that pay growth for employees changing jobs hit its highest rate in a year, confirming that tight labor supplies continue to drive up wage demands on employers.
Based on reporting by Tim Henderson originally published by Stateline. Read the original story.
