The Bureau of Labor Statistics reported Friday that nonfarm payrolls fell by 23,000 in July, far below the consensus forecast of roughly 83,000 gains, in the first monthly decline since February. Government employment led the drop, shedding 53,000 positions, while retail, leisure and hospitality, and financial services also contracted. The Labor Department also revised combined May and June job totals downward by 103,000, deepening the picture of a softening market.
The unemployment rate edged lower to 4.1 percent from 4.2 percent in June, but analysts noted the decline reflected falling labor force participation rather than stronger hiring. Average hourly earnings rose just two cents in the month, pulling the year-over-year wage growth rate to 3.2 percent u2014 the lowest since May 2021 and well below the 3.5 percent pace forecast. Richmond Fed President Tom Barkin described the labor market as 'not loose, not tight,' and said the workforce is barely growing given lower immigration, demographic shifts, and an aging population.
Markets responded positively to the data, with the S&P 500 advancing 0.3 percent and the Nasdaq rising 0.9 percent on Friday as traders cut their bets on a September rate hike. The CME FedWatch Tool showed the probability of a hike at the next meeting falling from 55 percent to 44 percent following the release. However, analysts cautioned that Wednesday's July CPI report u2014 the last major inflation reading before the September FOMC meeting u2014 will likely be the deciding factor in the Fed's next move.
The jobs data arrived alongside fresh political turbulence at the central bank. President Trump, in a letter dated August 6, formally notified Fed Governor Lisa Cook that he was 'considering removing' her over unproven mortgage-fraud allegations, giving her until August 26 to respond. Cook's attorney called the allegations 'as baseless now as they were a year ago' and said they would challenge the move in court. The Supreme Court had blocked Trump's earlier removal attempt in a 5-4 ruling in late June, and legal observers expect another prolonged court battle.
Berkshire Hathaway's second-quarter operating earnings climbed 16 percent to $12.98 billion, driven by a 24 percent jump in manufacturing, service and retail earnings and a 27 percent surge in energy profits. But CEO Greg Abel's report also highlighted weakness in consumer-facing units: Clayton Homes earnings declined on slow construction activity, auto dealership sales slipped, and furniture and jewelry businesses flagged sluggish demand tied to economic uncertainty and softer consumer confidence. BNSF railroad posted a 6 percent earnings gain on rising intermodal and consumer-products volumes, offering a useful real-time proxy for goods flow in the economy.
Oil prices ended Friday at $83.55 a barrel for Brent u2014 up slightly on the day but down more than 7 percent for the week u2014 after Iran published a restrictive draft plan for Hormuz transit that would ban U.S. and Israeli ships and impose fees equivalent to 5 to 7 percent of cargo value on others. Oman has been negotiating a rate closer to 3 percent, while Washington wants no fees at all, and industry sources say U.S. sanctions and insurance restrictions make the current fee framework unworkable in practice. Ship traffic through the strait fell 33 percent on Friday compared to the prior day, underlining the continued disruption to the roughly 25 percent of world crude and 19 percent of global LNG that transited Hormuz in 2025.
President Trump sent a formal letter to Federal Reserve Governor Lisa Cook on August 6 stating he is considering her removal, citing unproven allegations of mortgage fraud u2014 the same charges that prompted an earlier firing attempt blocked by the Supreme Court 5-4 in late June. Cook has been given until August 26 to respond, and her attorney vowed to fight the effort, calling it a bid to interfere with the Fed's independence. The renewed attempt comes as the FOMC is divided on whether to raise rates in September, and analysts note that any prolonged legal fight could inject uncertainty into markets already focused on the inflation outlook.
The Bureau of Labor Statistics is scheduled to publish the July Consumer Price Index on Wednesday, August 12, at 8:30 a.m. ET u2014 the final major inflation data point before the Fed's September meeting. In June, headline CPI came in at 3.5 percent year-over-year, down from 4.2 percent in May largely due to falling oil prices, while core CPI eased to 2.6 percent. Analysts across Wall Street have said the weak July jobs report may ease pressure for a hike, but a hot CPI reading could quickly revive that debate, keeping businesses and borrowers in a holding pattern on financing decisions.
Whatnot, the live-shopping marketplace built around small businesses and independent sellers, raised $545 million in a Series G round led by ICONIQ, Lightspeed Venture Partners and Avra, pushing its valuation to $20 billion u2014 nearly double the $11.5 billion figure from its October 2025 Series F. The company said first-half 2026 gross merchandise volume already surpassed the $8 billion it recorded in all of 2025, with more than 650,000 new users joining each week. The share of sellers earning a full-time income on the platform has increased 25 percent over the past year, and CEO Grant LaFontaine said the new capital will fund better seller tools, expanded AI features and new international markets.
Global venture funding reached $510 billion in the first half of 2026, with AI accounting for more than 70 percent of all venture capital deployed in the second quarter, according to Crunchbase data cited by AI Funding Tracker. OpenAI and Anthropic together absorbed $217 billion, or 43 percent of all venture dollars in the period, though deal volume did not rise proportionally u2014 pointing to a market dominated by a handful of massive transactions rather than broad-based startup activity. Defense tech separately attracted $12.3 billion in venture capital in H1 2026, nearly double last year's total, driven by demand for autonomous drones, vessels and battlefield AI systems.
The July jobs report's near-flat wage growth u2014 average hourly earnings up just two cents, pulling the annual rate to 3.2 percent u2014 offers small employers some relief on labor cost pressure but also signals weakening consumer spending power. Richmond Fed President Tom Barkin noted that businesses he speaks with are still not actively hiring but also not laying off workers, describing a 'zero-ish workforce growth environment.' Labor force participation has declined 0.7 percentage points since January, shrinking the pool of available workers and complicating recruitment for businesses that do need to hire.
Berkshire Hathaway's second-quarter filing offered a ground-level view of consumer conditions: Clayton Homes earnings declined on low home construction activity, auto unit sales slipped at its dealership group, and the furniture and jewelry businesses reported sluggish demand. McLane, Berkshire's wholesale distributor supplying convenience stores, restaurants and retailers, saw softer sales in its retail-store channel. For small business owners in housing, home furnishings, auto retail and consumer goods distribution, the Berkshire data points confirm what many operators are already experiencing: consumers are pulling back.
The rate environment remains the dominant cost variable for most small and mid-sized businesses. Friday's jobs miss reduced the near-term odds of a September rate hike, which matters for anyone carrying variable-rate debt, financing equipment or considering a commercial real estate move. But with the Fed still split, rates at 3.50u20133.75 percent, and Wednesday's CPI print unresolved, locking in financing now rather than waiting on further clarity may be the more defensible posture.
Energy costs and supply chain risk remain elevated as long as the Strait of Hormuz stays functionally closed. Any business that imports goods, runs a vehicle fleet or purchases petroleum-derived inputs should be watching the Iran-Oman talks closely u2014 the spread between a deal and a breakdown is still wide, and oil could move sharply in either direction. Whatnot's record funding round is also a signal worth noting for small retailers and brands: live commerce is now mainstream, and the platform's growth in full-time seller income suggests it is a viable direct-sales channel worth evaluating.