The U.S. economy unexpectedly lost 23,000 jobs in July, a stunning reversal that obliterated expectations and immediately rewrote the script for the Federal Reserve's next move. The unemployment rate held at 4.1%, but the real bombshell was the backward-looking revision: May and June payrolls were slashed by a combined 103,000 jobs, painting a far grimmer picture of the labor market's trajectory than anyone had imagined.

Behind the Data

This wasn't just a...