Marketplace - Job losses reveal a shakier labor market

Episode Date: August 7, 2026

The July jobs report is out, and it’s a doozy: The U.S. labor market shed a net 23,000 jobs last month. Previous months, which saw moderate gains, were revised down. In this episode, which sectors cut the most roles, and what it all signals about the broader economy. Plus: Climbing car prices lock buyers in longer-term loans, communities combat a teacher shortage by building affordable housing, and we want to hear your stories about voluntarily leaving the workforce.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:The economy lost 23,000 jobs in July. Should the Fed be worried?Here's where the economy lost jobs in JulyCar prices continue to rise. Auto lenders compensate with long-term loansThe school districts building affordable housing for teachersHow leaving the labor force helped this caregiver find her calling

So about that jobs reports. From American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizzdahl. It is Friday. Today, this one is the 7th of August. Good as it always is to have you along, everybody. Disappointing, meager, surprising. All of them words one might use to describe the July unemployment report we got this very morning.

We are going to use some more words to figure out what it all means. And Catherine Rampel is at MS now. Also at the bulwark. David Gurra is at Bloomberg. Hey, you too. Hey, Kai. Mr. Gurran, we start with you. 23,000 jobs lost.

The negative side of the ledger rate goes to 4.1%. Revisions were down. Kind of feels like we got caught unawares by this thing. It does. So wildly away from what was expected by Wall Street. And a few things caught my eye. The first is the participation rate. So this is that measurement of who's looking for work.

work, and that filled something like 61%, which is the lowest it's been in many decades, if you take COVID out of the equation. The other is wages. I mean, that's something we've focused on a lot here, and we see that's kind of setting an historical record as well, slowest pace in more than five years. I think we got this other sense, too, just about how the pool of people working has shrunk, and, you know, there's so much to focus on, maybe we haven't been talking about immigration policy as much, but I think what we saw in Stark Relief today in these numbers is, you know,

reflection of the fact that there has been this big deportation campaign. This government has been sending folks who've been here home, and we see that in the numbers today as well. It's a smaller pool of workers as a result of that. We do indeed see it, and for the umpteenth time, immigration policy is a labor market story. Catherine Rampel, labor force participation rate or wages, which is your biggest concern? Or pick another one, if you like. I mean, they're both concerning for somewhat different reasons. So the labor force participation rate

suggests that people are just getting stuck and giving up potentially. And even though the unemployment rate is still relatively low, you know, in historical terms, it masks a lot because it means that when people are losing their jobs, they're not churning into new jobs that quickly. Like it's not such a bit, it's never fun if you lose your job, obviously. But the pain is normally relatively limited. And, you know, when you have a lot of churn in the economy,

because people turn out of jobs, they turn into jobs. And what we are seeing now is a lot of weakness where you have a huge fraction. I think it's like a quarter of people who are unemployed, have been unemployed for 20. seven weeks or longer. And then a lot of the people who are unemployed are just saying, you know what, it's not worth it. I'm dropping out of the labor force altogether. So all of that I think is extremely, extremely concerning. David, can we get back to that immigration thing for a minute? This is, this is a tad weeding, and I will count on you to keep us and take me back out of the weeds.

But there's going to come a time with the way immigration is going in this economy that we're not going to need the robust number of jobs that we have needed to keep the unemployment rate reasonably low. And it sort of looks like we are getting there. Yeah, I think that this was a real sign of that. And I think that we've kind of been faced with maybe largely anecdotal issue here since the start of the second term, which is, you know, there are jobs in this country we have counted on immigrants to do. And if immigrants aren't here to do them, what does that mean more broadly? So look, I think that this once again refocuses attention on that issue.

And again, I think that like the way that we have customarily or in recent years looked at the labor market has shifted radically as a result of the fact that we have this, you know, very, very prohibitive policy that's been put in place and enforced by the Trump administration. Catherine, can we talk about the Fed for a minute? And I know the answer here is yes, because that's what we do. But I want to talk about it in terms of this jobs report, because it does seem for years now, right, and a good like five-ish years, 63, 64 months, as Chairman Warsh has said. The Fed's been concentrating on inflation, and the jobs picture has kind of faded from their

attention. And I wonder when they might start thinking about that again. Is it going to happen now, maybe? It certainly looks like they should be thinking about it. The new Fed share, Warsh, has pretty explicitly said they're laser-focused on inflation. It has been in the FOMC statement. They have added a sentence that's like, we're focused on inflation. I forget the exact verbiage. We will ensure price stability.

It was very declarative. There you go. There is not a comparable, symmetric declaration about the labor market, which is the other part of their dual mandate, maximum employment and stable prices. And I think to date that has been because the labor market has been remarkably resilient. In fact, earlier this year, it kind of looked like we had this unexpected boomlet in jobs that maybe was more ephemeral or, dare I say, transitory than had been thought. Yeah, I know, exactly. I'm getting myself into hot water here.

But now, you know, there is a lot of fragility in the labor market. We saw some of, as you pointed out, we saw some of those. prior job gains revised downward in addition to the net job losses that we had in July. So all of that suggests that the Fed cannot just take a solid job market or maximum employment or whatever, you know, metric, whatever title you want to use for granted, they're going to have to start worrying about it. And I don't think it necessarily means that they're going to cut rates anytime soon. Market certainly don't seem to think that. But it may make them a little bit more hesitant to cut rates quite as quickly as markets had been expecting just a few days ago.

David, speaking of rates, there have now been, I think, seven members of the FOMC, either voting or alternate, I frankly don't recall, who have come out since the most recent meeting and said, oh, yeah, we're going to have to raise rates, and I'm ready to do that. And I find that really interesting because Chairman Warsh has said, no, no, no, we're not doing forward guidance, you know? the market was so dissatisfied with the way that Kevin Warsh approached that last press conference, how reticent he was to talk about the future. And I think in that vacuum, you've seen a number of these Federal Open Market Committee participants stepping up. And so you're right. I mean, we heard from John Williams, the president of the New York Fed, talking about inflation,

really kind of filling that vacuum once again. And then, look, you had those three dissents at the last meeting in pretty short order. We got statements from them as well. Neil Cashcarry talking about kind of a need to kind of approach. inflation more incrementally. So I think it highlights what we've talked about so many times, Kai, which is we put a lot of emphasis on the role of the Federal Reserve chair, but this is a body of more than just one man, and they have the latitude to speak when they want to speak, even if the chair opts not to. And I think for the market, for economists who are kind of looking for some indication

of where this Fed is going, they're going to place more importance on what these other participants are going to say here. So I think that what we've seen since that meeting, since that rate decision, is them kind of recognizing the power that they have here, absent the chair, kind of being front and center to convey that information to investors. I personally will be grabbing my popcorn. Catherine Appell, we're going to take another minute, and I mean that in the truest sense of the word. You got one minute. Talk to me about the Lindsay Graham-Russia sanctions act, and most specifically what it says about tariffs and the president's authority and what the Senate's about to give him now. Oh, boy.

Okay. So this bill is ostensibly intended to punish Russia, to literally sanctioning Russia is in the name of it. However, it actually does relatively little in terms of sanctions. It doesn't give the president any additional authority to sanction that he doesn't already have and has chosen not to use. It does, on the other hand, vastly expand his ability to levy new tariffs. new, widespread, enormous tariffs on potentially any country that he wants. It's supposed to be, you know, only the countries that are buying oil and natural gas from Russia or somehow facilitating sanctions evasion. But it's written so vaguely that it basically allows the president to levy

100% tariffs in perpetuity on virtually any country that he wants. And so, yeah, it's pretty problematic. If you've looked at how this president has pushed the limits of existing trade law to date and wreaked havoc across the world and raised prices here at home through those tariffs, I don't quite understand

why Congress is voluntarily giving him more trade power, but that is what the Senate at least has decided to do. We'll see what the House does. What one asks could possibly go wrong. Catherine Impel, I mess now with the bulwark. David Gara, Bloomberg. Thanks you too. Thanks, guy. Wall Street today, Texas.

The day, details numbers. You all know the drill. Pretty much any way you slice it, this was a pretty bad jobs report. So we're going to slice it a little bit more. Local government lost jobs, leisure and hospitality lost jobs, finance and retail lost jobs. Marketplace's Mitchell Hartman has more now on the weak links in the job creation chain. Let's start with the sector that lost the most jobs in July. Local government education, which is mostly K through 12 public schools, down almost 50,000. Such a sharp drop could be a flaw in seasonal adjustment, says Elise Gould at the Economic Policy Institute,

because so many teachers are laid off in the summer. At the same time, local education employment has fallen every month since March. When school's still in session. And we know that there have been funding cuts at the Department of Education. Worst budget cuts may be coming, and that could cause even more uncertainty bet hiring or keeping teachers on staff. Financial Services is another job loser. It's down 114,000 in the last year. This is partly about the weak housing market and high mortgage rates,

says Brian Bethune at Boston College. Mortgage activity is slowed to a standstill. Also at risk are back office jobs in areas like compliance and fraud prevention, says nationwide economist Kathy Bus Jansick. We do see AI having some impact. If they're doing a job, they can be automated. it. Bostensik points to another sector that's lost jobs in both June and July, leisure and hospitality. And the surprising part there is that it happened during the World Cup, right? Ticket sales were strong,

attendance, tourism. Andrew Flowers at Recruitment Technology firm Appcast sees a reason that both leisure and hospitality and retail shed jobs in July. Those are very consumer-facing industries. inflation is now outpacing wage gains, so households are starting to pull back on spending. And companies are ready to let their head counts shrink in case consumers keep getting more frugal into the fall. I'm Mitchell Hartman for Marketplace. Jobs were not the only data delivered to us today from the Federal Reserve came June's Consumer Credit Report, how we are handling our credit cards and our car and student loans. The quick headline, we're borrowing more, which is possibly.

not a surprise to you. Car loans is one especially troubled corner of the market where delinquencies and repossessions are hovering near historic highs. Marketplace is Kristen Schwab. Takes a look at that. You can probably guess some of the reasons why so many Americans are having trouble making car payments. For one, inflation and gas prices are squeezing budgets. Also, interest rates on car loans are high, averaging about 7% for borrowers with good credit. But the real problem, says Reischefska, founder of Car Buying Service Car Edge? The price of cars is too damn high. Shefska would know.

He spent decades selling cars and has watched the average price of a new vehicle climb to nearly $50,000. That makes the average payment more than $750. And Sheffska says buyers are taking out loans that last up to eight years. That's in order to get an affordable monthly payment that ultimately comes back to bite the customer Long-term loans rack up a lot of interest, and they far exceed the length of a standard warranty, which means a lot of people end up paying for repairs while they're still trying to pay off their car. Jeremy Robb, chief economist at Cox Automotive, says expensive extended loans have become the cultural norm.

It's the subscription society. People have gotten used to paying for stuff over time, and that can help them justify buying more expensive cars. You know, when we pay for Netflix and you pay for Apple TV and you pay for your iPhone, you know, $30 a month, and it's like I think it's pretty easy to get yourself sideways. The thing is, if consumers get sideways and stop paying their loans, dealers and lenders get sideways too. Jessica Caldwell is Head of Insights at Edmonds. She says lenders have become so concerned about losing money. They're negotiating with borrowers.

companies want to avoid repossessing cars. It just makes everyone in the whole process not happy, except for maybe the repo guy who makes money on this. And these long-term loans have created a looming and much bigger problem. They've shrunk the pool of buyers. Trade-ins are a big driver of churn for carmakers. And Caldwell says most people who trade in their cars do so after six years. But if a borrower's loan term is longer than that,

they are walking into the dealership with negative equity. In other words, the longer it takes someone to pay off their car, the longer they are likely to hold on to it. If people are keeping their vehicles for longer periods of times, that means you just don't have as many people cycling through as often. The average age of a car in the U.S. is growing. It's now 13 years old. And auto sales are below what they were pre-pandemic. Ray Shevska at Car Edge expects them to be flat for the next decade or so. You know, how long is it really sustainable? How long can we continue to extend loan terms to seven and eight and nine?

And we know of some banks that are offering 10-year auto loans. He says it's sustainable as long as people keep signing up. I'm Kristen Schwab for Marketplace. Coming up. No one assigns you this role. It just lands on you. Oh, ain't that always the way? First, though, let's do the numbers.

Down Dust drills up 151 today, about 310%. 54,036. The NASDAQ up 342 points, 1.3%, 26,690. S&P 500 up 47, 610%, 7757 there. For the week, the 5%. days gone by. The Dow up almost 3%. The NASDAQ climbed more than 5%. S&P 500 gained about 3.6%. Bonds rose as well to yield on the 10-year T-note, thus fell, 4.64%. You're listening to Marketplace. This is Marketplace. I'm Kai Rizzdal. There is, as I don't think you have to have school-age kids to have heard,

a teacher shortage in this country. The Learning Policy Institute says the number of teaching positions unfilled or filled by teachers not fully certified for their assignments, tops 425,000. One of the reasons for this, there are many, of course, but a big one is that in some of the most expensive places, it is difficult, if not impossible, to afford housing on what a teacher makes. But Patrick Sisson wrote about one possible solution in the New York Times. Patrick, welcome to the program.

Good to have you on. Yeah, thanks for having me. Teachers not being able to afford to live where they work and teach is not new, but it is increasingly a crisis, especially in states like Florida and Texas and here in California. Interesting solution that you write about. What are these districts doing? Well, the districts are taking advantage of the fact that they tend to have a lot of excess land. A big challenge they're facing is a lack of enrollment, meaning they have school closures and administrative sites they're not using. So they're leasing that land out to developers. are turning that into affordable and workforce housing. How does it work? I mean, they,

those developers sign a, you know, I don't know, 10, 20, 30 year lease and then in return, the districts get, I imagine, some kind of break on the actual cost of the housing. Well, what usually works is that it's sort of a public-private partnership situation. The district leases out the land. The examples I've been looking at in detail are 99-year leases. So they get a bit of the sort of mortgage payment on the land. And the developers control the building. There's a sort of uncomfortable situation where you don't want your boss to also be your landlord. So this sort of avoids that, but also allows the school district to have long-term control of the land and help shape how the development takes place. And they're doing it at scale, too.

I mean, you're right about San Diego, actually, six sites, you say, that are going to turn into 2,500 apartments for teachers. I mean, that's a lot of real estate. Yeah, I mean, this is something that's been taken off over the last couple years in particular in California. I think at this point there's about a thousand units that are in use right now in districts across the state. But yes, the San Diego project would be the biggest project to date across the country. It is a thing one imagines that could spill over into other industries. I mean, it's not just schools and school districts that are having these problems, right? I mean, all kinds of districts.

Yeah, I mean, there's been a huge movement across the country to figure out ways to subsidized housing for, you know, first responders, nurses, firefighters. And this is something that is being looked at across the board. One of the organizers I spoke with here said that, you know, they're trying to figure out, can we do this for hospital districts? This is a really big idea, like, you know, the sort of fundamental workers and the very important roles in our society are just having increasingly hard time affording to live where they're working. Yeah. Let me interject just because it's real out there, the specter of nimbism, right?

And for all the societal good this will do, one does imagine that affordable, housing at scale in some of these places will bring down overall property values. Or am I, you know, getting too negative here? I mean, you definitely see some complaints and pushback evolving here. Now, on one hand, like, you get your typical, to your point, nibious complaints about, hey, this is going to, like, lower property values. You also hear people say, like, hey, these are great historical school buildings. We don't want to lose those. And even, hey, this was an underused big school lot with this great yard. Like, I don't want to lose where I'm walking my dog or where I play with my kids, right?

On the other hand, a lot of people hear about this and say, like, I would love having more teachers in my district, teaching to my kids' schools. We love teachers. This is great to have them here. Under the utilized property becomes a place where families live. And it really, like, adds more vibrancy to neighborhoods. Also, and not for nothing, you de-stress teachers' lives.

Tell us about this woman you start this piece with, who had been driving four hours to teach. One cannot imagine that that doesn't get reflected in the classroom. Oh, yeah. This teacher who was doing early childhood education in San Diego, she was driving from Tijuana to to be clear, got across the border. Yes, 100%. Yeah, and that was one of the reasons it took so long.

She'd wake up in the morning, get her kids in the car. They'd spend hours going through border crossing, getting to work. She'd do the same thing on the way home. She said the ability to live at a subsidized unit in San Diego was like a miracle. Now she lives a few minutes away from her job and her kids couldn't walk to their school. So it's a completely changed experience. Yeah, I bet. I bet. Patrick Sisson, writing in the New York Times. Patrick, thanks a lot. Appreciate your time.

Thank you. Catherine and David and I were talking about the labor force participation rate up at the top of the program. That's the percentage of people over 16 who either have a job or are looking for one. It dropped a bit in July, down 7 tenths of one percent since the beginning of the year. But if you look farther back, say the past 20 years or so, declining labor force participation is a long-term trend. My name is Kipper Hendrick, and I am a caregiver of 20 years, and I also created a caregiving community on social media for 90,000 caregivers. My career started in the museum space, and I worked in a science museum in Cleveland, art museum in West Palm Beach. And then I worked in sports marketing.

And during these years, my parents started needing more and more help for siblings. And it was gradual. I slowly was the one who showed up for these hospital visits and doctor's appointments. And at some point, it just became clear that I couldn't do both anymore. I couldn't have my job, my career. and care from my parents. I moved out of the workforce entirely. I had sold my apartment, so I had some savings to live off of.

And then also I had a conversation with my father who realized what I was giving up. And he did pay me. And that's very unusual. No one assigns you this role. It just lands on you. Your career, your savings, all become secondary to your parents' survival.

But no one else was going to do this. My sweet mother passed away three and a half years ago, a very beautiful, peaceful passing in her home, holding my father's hand and mine. I since went on to take a course to be an end-of-life coach because that experience with the hospice was so beautiful. And then two years ago, I thought, well, let me start a little business, and I mean little, where I'm helping these families manage care for their aging parents. I wear the badge of caregiver proudly.

And I always say that either you've been a caregiver or you are a caregiver now or you're going to be one. So let's help each other too along the way. Yeah, let's. Kipper Hendrick, Palm Beach County, Florida. So we are looking for more stories about people leaving the labor force. Whatever the reason? Taking care of kids, going back to school, early retirement, voluntary or otherwise? Share your story with us, would you?

Marketplace. slash clockdown. This final note on the way out today in which President Trump tries once again to get around a Supreme Court decision he does not like. Yesterday, it was birthright citizenship. You heard about this. The court rejected the president's best efforts to limit it earlier this year. Today, it's whether he can fire Fed Governor Lisa Cook.

The court ruled a couple of months ago that the president had, at a minimum, not given Cook, the process she is entitled to to contest her purported firing. This afternoon, the White House sent Cook a letter saying, It is considering, again, removing her. It is important to note here, Cook has been charged with exactly nothing. Our theme music was composed by B.J. Leaderman, Marketplace's executive producer is Nancy Fargolly. Joanne Griffith is the chief content officer. Neil Scarborough is the vice president, general manager.

And I'm Kai Rizdahl. Have yourselves a great weekend, everybody. We will see you back here on Monday, all right? This is 8 p.m.