The U.S. lost 23,000 jobs in July, far shy of forecasts for a gain of 80,000

The U.S. labor market showed weakness for the second consecutive month in July, possibly giving the Federal Reserve room to hold rates in place despite high inflation.

According to the government’s Nonfarm Payrolls Report released Friday morning, the U.S. lost 23,000 jobs last month. That was far below the consensus expectation of a gain of 80,000 jobs, and down from June’s add of 20,000 (revised down from an originally reported 57,000).

The last negative jobs print was in February, when the U.S. lost 156,000 jobs.

The unemployment rate dipped to 4.1%, compared with the expected 4.2% and June’s 4.2%.

Market reaction is swift, with U.S. stock index futures gaining and interest rates dipping. There’s little action in crypto, with bitcoin remaining modestly higher on the session at $65,000.

Ahead of this morning’s data, markets were split on whether the Fed would hike rates at its next policy meeting in September. According to CME FedWatch, interest rate traders were pricing in a 55% chance the U.S. central bank would tighten next month. In the immediate aftermath of the print, that number has slipped back to 46%.