Investing.com -- Bank of America reported that nonfarm payrolls decreased by 23,000 in July, with an additional 103,000 in downward revisions to the prior two months. Private sector job growth reached 30,000 for the month.

The unemployment rate fell to 4.1% from 4.189%, driven by a decline in labor force participation. Household employment dropped by 87,000, while household unemployment decreased by 178,000.

Wage growth came in below expectations at 0.1% month-over-month and 3.2% year-over-year. The labor force participation rate ticked down to 61.4%, with declines concentrated among non-prime age workers, particularly younger workers.

The decline in payrolls was driven by local government education services, which fell by 50,000, and leisure and hospitality, which dropped by 40,000. Financial services decreased by 14,000.

Construction jobs increased by 22,000 in July. Professional and business services added 18,000 positions, while health care added 22,000 jobs.

Bank of America noted that job growth averaged 30,000 over the last three months, or 40,000 in the private sector, compared to the bank's estimated breakeven pace of 20,000.

The bank maintained its forecast that the Federal Reserve will raise rates by 75 basis points this year, beginning in September. Bank of America stated the Fed is likely to remain more focused on inflation than labor market conditions.

Markets reduced expectations for rate cuts by year-end by 5 basis points following the employment data.