The U.S. labor market took an unexpected vacation in July, with employers cutting 23,000 jobs, according to a Labor Department report released Friday. Construction companies and factories kept adding workers, but retailers and restaurants decided they'd had enough and shed jobs. It's the second consecutive month the monthly jobs tally has underperformed forecasters' expectations, which is starting to feel like a trend.

The unemployment rate dipped slightly to 4.1%, but here's the kicker: that's only because more than 260,000 people just threw in the towel and left the workforce altogether. Nothing says "healthy economy" like a bunch of people giving up.

Daniel Zhao, chief economist at job search website Glassdoor, says workers are feeling the squeeze. "We are increasingly hearing from workers that they are anxious about their job security and they are frustrated by the fact that they are stuck in roles that are not necessarily good for them," he said. "And that's on top of workers who are not in a job right now and feel frozen out of the job market." Glassdoor's worker confidence index hit a record low in July, because of course it did.

Restaurants and retailers cut thousands of jobs, local government saw big losses, and healthcare added workers but at a more modest pace than earlier in the year. Even the healthcare sector is getting tired.

This softening job market is throwing a wrench into the Federal Reserve's plans. They're already battling stubborn inflation, and now they have to worry about a less stable labor market. The Fed might think twice about raising interest rates when the job market is this wobbly.

For those still working, average wages have risen 3.2% over the last 12 months. That sounds decent until you remember inflation is a thing, and those gains are being eaten alive by rising energy prices. As Zhao puts it, "a lot of those wage gains have been eaten up by rising energy prices." So workers' paychecks don't stretch as far as they used to, but hey, at least they're getting more steps in walking to work instead of driving.