WASHINGTON— U.S. job growth slowed sharply in June as employers added just 57,000 jobs, well below economists’ expectations, while the unemployment rate edged down to 4.2% as hundreds of thousands of Americans left the labor force, according to government data released Thursday.
The weaker-than-expected report from the U.S. Bureau of Labor Statistics suggested the labor market continued to cool after several years of robust hiring. The report also included downward revisions to payroll gains for April and May, indicating hiring has been weaker than previously reported.
“June job growth came below expectations, but the three-month average pace of hiring still runs ahead of last year’s, so the labor market retains more momentum than this report implies,” America’s Credit Unions’ Senior Economist Dawit Kebede said in a statement. “The unemployment rate declined, but that reflected more people stepping out of the labor force than workers finding jobs. Markets have moved to price higher odds of a rate hike before year-end as inflation is still the dominant concern. With wage growth continuing to trail inflation, households are steadily losing purchasing power even as the labor market holds together.”
Nonfarm Payroll Up 57,000
Total nonfarm payroll employment increased by 57,000 in June, while the unemployment rate slipped from 4.3% in May to 4.2%. Economists had generally expected payroll growth of about 110,000 jobs.
The Labor Department revised April job gains downward by 31,000, from 179,000 to 148,000, and May employment growth lower by 43,000, from 172,000 to 129,000. Combined, the revisions reduced previously reported employment gains by 74,000 jobs.
What the Data Show
Other data points in the new BLS report show:
- The unemployment rate declined even as the labor force participation rate fell 0.3 percentage point to 61.5%, reflecting fewer Americans either working or actively seeking work. The employment-population ratio also slipped to 59.0%.
- Employment gains during June were concentrated in a handful of industries.
- Professional and business services added 36,000 jobs, social assistance increased employment by 25,000, and health care added 22,000 positions. Offsetting those gains, leisure and hospitality shed 61,000 jobs, a decline the government attributed to weaker-than-usual seasonal hiring. Most other major industries were little changed during the month.
- Average hourly earnings for all private-sector employees rose 13 cents, or 0.3%, to $37.64 in June and were up 3.5% from a year earlier. The average workweek remained unchanged at 34.3 hours.
Long-Term Unemployment is Elevated
The report also showed that long-term unemployment remained elevated. About 1.9 million people had been unemployed for 27 weeks or longer in June, accounting for 27.3% of all unemployed workers. That figure has increased by 286,000 over the past year.
In a statement accompanying the report, Acting Labor Secretary Keith Sonderling characterized the figures as evidence of continued labor market stability.
“Under President Trump’s leadership, the American labor market remains resilient,” Sonderling said, pointing to continued employment gains and wage growth while noting the unemployment rate remained historically low.
Reuters reported financial markets interpreted the report as reducing pressure on the Federal Reserve to raise interest rates in the near term. Treasury yields declined following the release, and investors reduced expectations for a July rate increase after the weaker-than-anticipated hiring figures.
