By Nicholas Brown, Tech & Politics Correspondent, Stock Trader Network

The U.S. economy lost 23,000 jobs in July, badly missing expectations for an 83,000 gain. Beneath that headline was another warning—Americans are continuing to lose full-time work.

Full-time employment fell by 106,000 in July and has now declined in six of the past seven months, according to the household survey. Part-time employment, meanwhile, rose by 138,000.

The unemployment rate held at 4.1%, helped by a shrinking pool of workers. Labor-force participation has now surrendered all of its gains since February 2021, according to Kevin Gordon, head of macro research and strategy at Charles Schwab.

The payroll decline was heavily influenced by local government education, which shed 50,000 jobs. That makes July’s headline number somewhat harder to read.

Blu Putnam, chief economist at Stock Trader Network, said the education decline could reflect seasonal quirks surrounding the school calendar and the late Labor Day holiday.

“If there is a seasonal problem, these jobs may pop right back in August or September,” Putnam said.

That possibility makes the deterioration in full-time employment arguably more important than the payroll decline itself.

“Not sure what to make of the full-time employment declines, but it can’t be good,” Putnam said. “I think it may presage slower growth in personal consumption spending, which means Q3 real GDP might be very sluggish.”

Wages offered another sign of cooling as the three-month annualized increase in average hourly earnings slowed to 2.26% in July, a new cycle low, Gordon noted.

The weakness is also increasingly apparent in the household survey, which showed total employment falling by 87,000 despite the increase in part-time work.

“The household survey has become more pessimistic than the payroll survey,” Putnam said. “I am not sure if one leads the other, but I always get cautious when there is a big divergence.”

That is what makes July more than an ugly headline. The 23,000 payroll decline could prove partly seasonal but seven months of deteriorating full-time employment are harder to dismiss.

If that trend continues, the next question is whether weaker job quality begins showing up in consumer spending, and ultimately, economic growth.