WASHINGTON — While the broader U.S. job market stumbled badly in July, health care stood out as one of the only sectors still adding workers at a robust pace, underscoring the industry’s resilience amid slowing economic growth and rising trade tensions.
The U.S. economy added just 73,000 jobs in July, the weakest gain in over a year, according to the Bureau of Labor Statistics. The headline figure was made even gloomier by deep downward revisions to earlier data: May’s job gains were cut from 144,000 to 19,000, and June’s from 147,000 to 14,000, a combined loss of 258,000 jobs from initial estimates.
That leaves the economy averaging only 35,000 new jobs per month over the past three months, a pace not seen since the early days of the pandemic. Without health care’s strong hiring, the overall labor market picture would be even worse.
Health care defies the slowdown
Health care added 55,000 jobs in July, well above its 12‑month average of 42,000. Gains were spread across the sector, with ambulatory health care services, such as physicians’ offices and outpatient clinics, adding 34,000 jobs, and hospitals adding 16,000.
Federal Reserve Governor Michelle Bowman stated that the labor market is exhibiting "growing signs of fragility,” with job growth mainly concentrated in a limited range of industries such as health care and social services, which are less influenced by economic fluctuations.
Social assistance, which includes many community-based and long-term care services, added 18,000 jobs. Together, the sectors accounted for nearly all of July’s net job growth.
Employment in many other major sectors, including retail, manufacturing, and construction, remained flat or declined in July. Manufacturing alone shed 11,000 jobs, while the federal government cut another 12,000 positions.
Tariffs add to uncertainty
The latest jobs report landed just one day after President Donald Trump announced sweeping new import tariffs that could raise prices across the economy, including in the health‑care supply chain. Duties as high as 50% will apply to certain imports from Brazil, 35% from Canada, and 25% from India, while most other countries will face a baseline duty of 10%.
Although health care is largely domestically delivered, it relies heavily on imported medical equipment, pharmaceuticals, and personal protective equipment. Rising import costs could put additional strain on providers already grappling with staffing shortages and cost inflation.
Wage growth and staffing pressures
Average hourly earnings for all private‑sector workers rose 3.9% year‑over‑year in July, but in many health‑care occupations, wage pressures remain even stronger. Fierce competition for nurses, technicians, and other skilled staff continues to push pay higher, especially in high‑demand specialties.
Yet, those increases may be outpaced by inflation if tariffs are passed through to consumer prices more broadly. The Personal Consumption Expenditures index rose 2.6% in June compared to the same period a year earlier, and economists warn that tariffs could accelerate this trend, potentially squeezing hospital margins if reimbursement rates fail to keep pace.
Health care as an economic stabilizer
Economists say the health‑care sector’s steady hiring has helped prevent overall job losses in recent months, providing a stabilizing effect on the economy. But they caution that no industry is entirely immune to broader economic shocks.
For now, the sector appears likely to continue hiring through the rest of the year, driven by demographic trends and pent-up demand for services that were delayed during the pandemic. But with the broader job market slowing and costs set to rise, health‑care leaders may find themselves navigating an increasingly complex operating environment.
