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While the Employment Ratio (people with jobs as a fraction of the population) was unchanged, the Labor Force Participation rate increased. That is: the fraction of people looking for work increased. The contribution of these two factors to U3 is shown in the chart to the right.
Most of July’s incease in participation seems to have come from the 20 to 24 years age group. This is college age and the end of the scholastic year. This situation is ripe for seasonal adjustment challenges, and unfortunately the BLS does not publish its internally revised June numbers.
Most other sectors of the population saw a drop in July participation. Note, though, how the Labor Force Participation rate has seemed to find a bottom a year ago.