The American job market went backward last month. Employers cut 23,000 jobs in July, the Bureau of Labor Statistics reported Friday, against forecasts of an 83,000 gain.

The unemployment rate edged down a tenth of a point to 4.1 percent, but not for encouraging reasons. The decline came largely from people leaving the workforce rather than finding jobs. Labor force participation held at 61.4 percent, down seven-tenths of a point since January, and the employment-to-population ratio slipped to 58.9 percent.

Public payrolls fell by 53,000, concentrated in local government education, while private employers added 30,000. Retail trade lost jobs, leisure and hospitality softened, and health care kept growing but more slowly than it had been.

Revisions made the picture worse. BLS marked down May by 66,000 jobs, to a gain of 63,000, and June by 37,000, to a gain of 20,000. Together, those two months came in 103,000 lower than first reported. Over the prior 12 months, payrolls had averaged monthly gains of 34,000.

Paychecks barely moved. Average hourly earnings rose two cents in July, pulling the 12-month increase down to 3.2 percent, the slowest pace since May 2021 and below the 3.5 percent economists expected.

The number of long-term unemployed, those out of work 27 weeks or longer, stood at 1.8 million, or 25.5 percent of all unemployed people. Those jobless less than five weeks fell to 2.0 million.

The report lands with the Federal Reserve divided. The Federal Open Market Committee voted 9-3 last week to leave its benchmark rate unchanged, and several officials have since said they would support raising rates in September if price increases do not slow. Inflation remains well above the Fed’s 2 percent target.

The August employment report is due in early September.