US employers unexpectedly cut 23,000 jobs in July, signalling a sharper slowdown in the labour market than economists had anticipated. The figures may reduce pressure on the Federal Reserve to raise interest rates despite persistent inflation, particularly as growth has weakened during the summer and amid conflict in the Middle East.

The unemployment rate remained at 4.1%, against forecasts of 83,000 new jobs, while May and June employment estimates were revised down by a combined 103,000. Losses were concentrated in local government education and retail, though the private sector added 30,000 jobs, mainly in healthcare; annual hourly pay growth was 3.2%, while job openings fell to 7.4 million in June.