Employers cut a more-than-expected 131,000 jobs in July as modest private sector job gains were outpaced by the loss of 143,000 temporary Census workers and steep layoffs by state and local governments, the Bureau of Labor Statistics reported Friday.
The total 131,000 job cuts also exceeded the 65,000 projected by economists.
"There's some loss of momentum here," says Jim O'Sullivan, chief economist of MF Global. "It's still a very weak labor market recovery."
Another troubling development: Total job cuts in June were revised upward to 221,000 from 125,000 as the private sector gained just 31,000 jobs, fewer than the 83,000 initially estimated.
Nevertheless, Friday's report provided no signals that the nation is at risk of slipping back into a recession that most economists believe ended last summer. Rather, the news simply underscored recent evidence of a weakening recovery, including sluggish consumer spending, a stalled housing market and a slowdown in factory output.
"Slower growth looks certain, but it's not a double dip," says Wells Fargo economist Mark Vitner.
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