The US economy added fewer than 100,000 jobs in July, according to the Labor Department's nonfarm payrolls report released Friday. The unemployment rate held near 4.2% as employers grew cautious amid tariff uncertainty.

Goldman Sachs and Morgan Stanley had forecast continued deceleration from the spring pace. The Bureau of Labor Statistics report follows several months of cooling in the labour market, with hiring concentrated in health care, leisure and hospitality, and government.

Manufacturing and retail have shown weakness as companies absorb higher input costs from tariffs imposed by the Trump administration on imported goods.

Average hourly earnings were expected to rise about 0.3% month on month, keeping annual wage growth near 3.7%, according to consensus estimates compiled by FactSet. Revisions to prior months will draw scrutiny after the BLS has repeatedly marked down earlier payroll figures this year.

Traders in federal funds futures priced in a strong probability of an interest-rate cut at the Federal Reserve's September meeting, according to CME Group's FedWatch tool. A weak report would strengthen the case for easing, while Chair Jerome Powell has said the central bank remains attentive to tariff-driven inflation risks.

Stock index futures and Treasury yields were likely to swing on the release, which lands during a busy corporate earnings season. Investors have watched labour data closely for signs that consumer spending, the main engine of US growth, is beginning to falter.