02:34 PM EDT, 08/01/2025 (MT Newswires) -- The July employment report was generally weak, with payrolls growth softer than expected following large downward revisions and the unemployment rate ticking higher.

Nonfarm payrolls rose by 73,000 in July after a 14,000 gain in June and a 19,000 increase in May, both revised sharply lower from their previous estimates. Private payrolls rose by 83,000, also below expectations and following a 3,000 gain in May.

Health care jobs rose by 73,300 in July, but other payrolls category gains were more modest and there were declines in manufacturing and wholesale trade jobs among others.

The unemployment rate rose to 4.2% from 4.1% in June, with the details showing a downturn in conditions. The labor force fell by 38,000 as labor force participation declined. Household employment fell by 260,000 while the number of unemployed rose by 221,000.

Average hourly earnings were up 0.3% in July, faster than a 0.2% increase in June, lifting the year-over-year rate to 3.9% from 3.8%.

The University of Michigan consumer sentiment index for July was revised slightly lower to 61.7 from the preliminary estimate of 61.8 but was above June's reading of 60.7.

Michigan said that inflation expectations improved markedly in July.

The ISM manufacturing index fell to 48.0 in July from a 49.0 level in June. The new orders and production readings improved but were more than offset by declines in the employment and price measures.

The S&P Global manufacturing PMI was revised higher to 49.8 in July from the flash estimate of 49.5 but was still below the 52.9 reading in June and represents the first sub-50 reading of 2025.

Construction spending fell by 0.4% in June following a 0.4% decline in May. Private residential construction fell by 0.7% on a 1.8% drop in single-family building and flat multi-family building, partially offset by a 0.5% gain in remodeling activity.

Private nonresidential construction was down 0.3% in June, while public construction rose by 0.1%.

The Q3 GDPnow estimate from the Atlanta Fed is for a 2.1% gain, revised up from a 2.3% gain reported Thursday. The next update is scheduled for Tuesday.