US Unexpectedly Loses Jobs in Blow to Trump Ahead of Midterms

People walk on the sidewalk in midtown Manhattan in New York, New York, US, 06 August 2026. (EPA)
People walk on the sidewalk in midtown Manhattan in New York, New York, US, 06 August 2026. (EPA)
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US Unexpectedly Loses Jobs in Blow to Trump Ahead of Midterms

People walk on the sidewalk in midtown Manhattan in New York, New York, US, 06 August 2026. (EPA)
People walk on the sidewalk in midtown Manhattan in New York, New York, US, 06 August 2026. (EPA)

The United States unexpectedly lost thousands of jobs in July, government data showed Friday, a blow to US President Donald Trump's claims of leading an economic revival as his Republican Party gears up for crucial midterm elections.

The world's largest economy lost 23,000 jobs in July, data published by the US Bureau of Labor Statistics showed, signaling potential labor market weakness after months of steady growth.

The unemployment rate ticked down to 4.1 percent, likely a result of falling labor supply as the US economy grapples with an aging population and lower net migration.

Since taking office for his second term, Trump has unleashed a spate of policies aimed at reviving domestic manufacturing and curbing surging inflation.

Republicans face a stiff test in November's midterm elections, with the state of the economy a key issue for Democrats who are seeking to wrest back control of both houses of Congress.

Friday's data will also pose a question to the US Federal Reserve, which has been signaling it was preparing for a rate hike later this year.

- Implications for Fed -

The bulk of the loss in July was attributed to the local government education sector, which sees thousands of teachers drop off payrolls in the summer months.

Still, analysts had expected overall job growth. Economists polled by Dow Jones Newswires and the Wall Street Journal anticipated 83,000 new jobs would be added in July.

The BLS also revised down job growth in the previous two months by 103,000, showing the labor market to be less robust than previously reported.

Based on the new figures, job growth hit a peak in March before declining in the next three months and entering negative territory in July.

White House economic advisor Kevin Hassett dismissed Friday's data as being based on a survey that is "very, very noisy."

The unemployment rate has remained relatively steady through choppiness in the labor market, due to the overall drop in labor supply.

Friday's figures showed the labor force participation rate -- a key metric -- had dropped to its lowest level since the height of pandemic-related closures.

Policymakers at the US Federal Reserve watch the labor market closely, as their dual mandate requires them to deliver maximum employment while ensuring inflation remains at a long-term target of two percent.

The Fed has missed that target for five years, as inflation has battered US households since the pandemic.

Last month, the central bank held interest rates steady, but three regional Fed presidents dissented in favor of a rate hike.

"This morning's report is a game changer in the sense that all of the recent focus has been on inflation and this report highlights the risks that are embedded in the labor market as well," said Chris Zaccarelli of Northlight Asset Management.

Kathy Bostjancic, chief economist at Nationwide, said the Fed would not be swayed by a single job report from its inflation focus.

"The soft labor market report should lower market expectations for a Fed rate hike in the coming months, but the inflation reports will be the key focus for Fed officials," she said.

- Wages lag inflation -

Sector-wise, retail trade lost 19,000 jobs, with employment declining in warehouse retailers -- firms like Costco, Sam's Club and others that offer discounts for wholesale quantities of household goods -- and general merchandise stores.

Employment in the financial activities sector continued its downward trend, having lost 121,000 jobs from its May 2025 peak.

The health care sector has buoyed the US labor market over the last year, with more Americans aging and requiring medical assistance.

In July, the sector added 22,000 jobs, but it was a slower pace than its average gain over the last year.

Average hourly earnings increased by 3.2 percent year-on-year, lagging inflation and therefore leaving workers with less income in real terms.

Diane Swonk, chief economist at KPMG, said persistent inflation and a potentially weak labor market could put the Fed in a tough spot when it meets to set rates next month.

"The worst combination for the Fed is if inflation remains sticky while the labor market weakens," she said.

"That would not take rate hikes off the table; it would make them more painful."



Fitch Keeps Qatar at 'AA'

The skyline of illuminated high-rise buildings is seen along the Corniche Promenade in Doha on September 4, 2026. (AFP)
The skyline of illuminated high-rise buildings is seen along the Corniche Promenade in Doha on September 4, 2026. (AFP)
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Fitch Keeps Qatar at 'AA'

The skyline of illuminated high-rise buildings is seen along the Corniche Promenade in Doha on September 4, 2026. (AFP)
The skyline of illuminated high-rise buildings is seen along the Corniche Promenade in Doha on September 4, 2026. (AFP)

Global ratings ‌agency Fitch removed Qatar from "Rating Watch Negative" and maintained its sovereign rating at "AA" on Friday, citing reduced risks to its LNG facilities since March.

However, the agency kept Qatar's outlook at "negative", citing lingering risks from the disruption of LNG exports through the Strait of Hormuz.

"The impact of the war on the credit profile will take longer to discern," the ⁠agency said in a statement.

One of ‌the world's largest liquefied natural gas exporters, Qatar ‌has been dealing with disruptions ‌to exports through the Strait of Hormuz and shortages linked to damage at energy facilities.

The affirmation comes months after Fitch ‌warned of a downgrade of the Qatar sovereign as concerns about ⁠the ⁠security and economic fallout from the Iran war intensified.

Peers S&P and Moody's had also affirmed Qatar earlier this year, saying the country's "sizable" fiscal profile cushions the impact of the US-Israeli war on Iran.


Jeddah to Host Saudi Industry Forum 2026 from September 14 to 16

A view of Jeddah, Saudi Arabia. (SPA)
A view of Jeddah, Saudi Arabia. (SPA)
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Jeddah to Host Saudi Industry Forum 2026 from September 14 to 16

A view of Jeddah, Saudi Arabia. (SPA)
A view of Jeddah, Saudi Arabia. (SPA)

Under the patronage of Advisor to the Custodian of the Two Holy Mosques and Governor of Makkah Region Prince Khalid bin Faisal bin Abdulaziz, Jeddah will host the second edition of the Saudi Industry Forum 2026 from September 14 to 16 at Jeddah Superdome, reported the Saudi Press Agency on Friday.

The forum is organized by the Federation of Saudi Chambers of Commerce, represented by the National Committee of Industry, in cooperation with the Jeddah Chamber.

The forum is held in strategic partnership with the Ministry of Industry and Mineral Resources and its ecosystem, with the participation of several government entities, national companies, universities, academic institutions, and research centers, as well as prominent leaders, officials, experts, and specialists from within and outside the Kingdom.

The forum will feature panel discussions and specialized workshops addressing key developments and opportunities in the industrial sector, the future of national industries, the enhancement of supply chains and logistics services, and the development of an integrated industrial base in strategic sectors, particularly the automotive industry, as well as the food and pharmaceutical industries.

The forum will discuss ways to enhance integration between the industrial sector, universities, and research and development centers; align academic and research outputs with the sector's needs; and utilize modern technologies to advance industry. It will also address strengthening local content, increasing the contribution of national enterprises, and highlighting promising investment opportunities.

The forum will witness the signing of several agreements and memoranda of understanding among government and private entities, as well as educational and research institutions, aimed at strengthening partnerships and integration among stakeholders in the industrial ecosystem, stimulating investment, and enhancing the competitiveness of national industry.

The forum comes amid the rapid growth and transformation of the Kingdom's industrial sector and its expanding role in diversifying the economic base, strengthening local content, and attracting investment, in support of the objectives of Saudi Vision 2030.


Norway's Sovereign Fund Proposes Deep Cuts to US Treasury Holdings

A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
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Norway's Sovereign Fund Proposes Deep Cuts to US Treasury Holdings

A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche

The manager of Norway's $2.3 trillion sovereign wealth fund has proposed significantly cutting its exposure to US Treasuries as part of a wider shake-up of its bond investments to improve returns, according to a letter published this week.

Norges Bank Investment Management has recommended reducing its weighting to government bonds within its benchmark bond index to 50% from 70%, with US Treasuries, the biggest holding, getting the biggest cut, according to the letter.

The changes would mean cutting nearly $80 billion from the fund's current holdings of about $215 billion of US Treasuries as of the end of June, according to Reuters calculations.

Government bond markets have been under pressure recently, with long-term borrowing costs soaring as rising inflation and government debt levels spooked investors.

Norway's sovereign wealth fund, the world's largest, owns on average 1.5% of ⁠all listed companies ⁠globally. Its scale means that portfolio decisions can influence broader market flows. Any cuts to its bond holdings are unlikely to be implemented until several months into 2027 at the earliest.

The letter containing the fund's proposals was sent in response to questions from Norway's finance ministry about the wealth fund's investment strategy for bonds.

Norges Bank IM said it would await the ministry's response, and any changes would be done gradually to limit market impact and transaction costs.

The proposals will form part of recommendations to the ministry in January.

They will be discussed ⁠as part of the fund's annual white paper process next spring, after which the ministry will make a final recommendation to parliament which will then hold a hearing, a Norges Bank IM spokesperson said.

"We recommend that the government subindex of the bond index be reduced from 70% to 50%," Ida Wolden Bache, governor of Norges Bank, and Norges Bank IM CEO Nicolai Tangen wrote in the letter.

"A government share of 50% will be sufficient to cover the liquidity needs, including in periods of turbulence in financial markets."

The fund also proposed considering an increase in investments in unlisted assets in a separate letter, in part as a way to reduce concentration risks that have grown in its equity portfolio amid the boom in the share prices of a handful of US tech companies.

Under its current mandate the fund can own unlisted real estate and renewable energy assets, but it has a lower share of unlisted investments ⁠than comparable funds.

Norges Bank IM said the biggest change to its bond index would be investing in more non-government debt, including mortgage-backed securities, to give it better diversification and exposure to risk premiums.

The spokesperson said total US dollar exposure would remain around 50%, adding: "What changes is the mix inside the dollar market: less US government debt, correspondingly more US mortgage and government-related bonds."

Under the proposals, the bond index weighting to US government bonds would reduce from 34.1% to 21.9%, according to the letter, with the allocation to euro area debt falling more modestly from 16.8% to 14.1%.

The allocation to Japanese government bonds would increase from 4.6% to 7.4%, while the UK allocation would remain unchanged at 4.2%. The fund said the changes would align the index more closely with the broader market weightings.

While US Treasuries exposure would fall, the proposed allocation to US non-government debt would jump from 16.2% to 27.6%, meaning that the overall bond index's weighting to the US dollar would fall only slightly, from 52.9% to 52.5%.

Europe's biggest pension fund, Dutch fund ABP, cut the value of its own US Treasury holdings in the first quarter of this year, Reuters previously reported.