Local public schools lose nearly 50,000 jobs as US hiring stalls

The U.S. economy lost 23,000 jobs in July, with local public school employment falling by 50,000. Districts across the country are facing tighter budgets and falling enrollment.

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The U.S. economy lost 23,000 jobs in July, with local public school employment falling by 50,000. Districts across the country are facing tighter budgets and falling enrollment.

WASHINGTON —

The U.S. economy lost 23,000 jobs in July, a sharp miss of forecasts calling for nearly 100,000 jobs to be added.

One of the biggest drags came from the nation’s public schools.

Employment in local government education fell by nearly 50,000 jobs in July, according to the Bureau of Labor Statistics.

Economists say the unusually large decline in July could have been amplified by the government’s seasonal adjustment process rather than reflecting 50,000 permanent layoffs.

A Hearst Television review of Bureau of Labor Statistics data found the nearly 50,000-job decline was the largest seasonally adjusted July drop in local public school employment since at least 2015.

The drop comes against a backdrop of mounting financial pressure on school districts nationwide. Pandemic-era federal aid has run out, enrollment has declined in many districts, and school systems are increasingly being forced to balance budgets with fewer resources.

Bloomberg reported in June that leaders in seven of the country’s 10 largest school districts were considering staff reductions. Recent job cuts were reported in Florida, Ohio and Pennsylvania.

Schools were not the only employers cutting jobs. Restaurants and bars lost 26,000 positions, and retailers lost 19,000. Private employers overall still added 30,000 jobs, while total government employment declined by 53,000.

The Labor Department revised May’s job gain down from 129,000 to 63,000 and June’s from 57,000 to just 20,000. Combined, the economy created 103,000 fewer jobs in those two months than previously reported.

The unemployment rate nevertheless fell from 4.2% to 4.1%, its lowest level since June 2025. But the decline did not come from a surge in employment. The drop was a result of fewer people actively looking for work.

The labor force shrank by 264,000 people in July as fewer Americans were working or actively looking for work. The labor force participation rate slipped to 61.4%, its lowest level since February 2021.