US Adds Just 57,000 Jobs in June as Hiring Slows Sharply
The U.S. economy added just 57,000 jobs in June, sharply missing economists’ expectations of roughly 113,000 to 115,000, according to data released Thursday by the Bureau of Labor Statistics. The unemployment rate ticked down to 4.2% from 4.3%, but the decline was driven largely by a sharp drop in labor force participation rather than a surge in hiring.
Average hourly earnings rose 3.5% year-over-year, trailing the most recent inflation reading of 4.2%, marking the third consecutive month that wage growth has fallen behind price increases. As NBC News reported, real wages are now declining for American workers.
A Cooling Labor Market
The June figure represents the weakest month of hiring since February, when the labor market briefly contracted. The BLS also issued significant downward revisions to the prior two months: April was revised down by 31,000 to 148,000, and May was revised down by 43,000 to 129,000, for a combined reduction of 74,000 jobs.
According to Yahoo Finance, the 12-month average of monthly job growth now stands at just 36,000. The three-month average is roughly 111,000, which economists note is still decent but marks a clear deceleration from the stronger readings earlier this year.
“The June jobs report wasn’t quite as peppy as the prior three reports, but it still points to overall general health in the labor market,” said Michael Feroli, chief U.S. economist at JPMorgan Chase, as quoted by NBC News.
Sector-by-Sector Breakdown
Health care, which had been the primary driver of job growth throughout 2025, added just 22,000 jobs in June — well below its 38,000 monthly average. Leisure and hospitality contracted sharply, losing 61,000 jobs amid what the BLS described as “weaker than usual seasonal hiring.”
Manufacturing added only 3,000 jobs, all in durable goods, and has now lost 75,000 positions since the start of 2025. Professional and business services, along with social assistance, were among the few sectors showing growth, while construction, retail trade, transportation, and financial activities all showed little change.
A Labor Force Exodus
The labor force participation rate fell to 61.5%, down 0.3 percentage points from May, as 720,000 people left the workforce entirely. As CBS Austin reported, the number of long-term unemployed — those out of work for 27 weeks or more — now stands at nearly 2 million, up 286,000 over the past year. Meanwhile, 4.5 million people are working part-time for economic reasons, and 6 million Americans are not in the labor force but say they want a job.
“This could be described as a lackluster employment picture,” said Mark Hamrick, an economic analyst and founder of The Hamrick Brief. He noted that the job market has “shifted back into a more familiar, lower-hire, lower-fire job market mode.”
Elise Gould, senior economist at the Economic Policy Institute, warned that the unemployment rate ticked down “for the wrong reasons,” as both labor force participation and employment fell. She added that real wages are “most surely now below where they were in January 2025.”
Implications for the Federal Reserve
The June jobs report arrives at a critical juncture for the Federal Reserve, which held interest rates at 3.50%-3.75% at its June 17 meeting under new Chairman Kevin Warsh. According to Yahoo Finance, markets are pricing an 80% chance the Fed will hold rates steady at its late-July meeting, with the probability of a rate hike in September or October falling from 50% to 46% after the report.
“The Warsh Fed is an inflation-first Fed and its new Chair rejects a mechanical link between labor market strength and inflation,” said Krishna Guha, head of economics at Evercore ISI. “So we think the labor report will not have material implications either way for the rate outlook.”
Jeffrey Roach, chief economist at LPL Financial, noted that “for now, the labor market is holding, giving the Fed opportunity to stay focused on price stability.”
What to Watch
With inflation data for June due on July 14 and the next FOMC meeting scheduled for late July, the coming weeks will be critical in determining the Fed’s next move. The cooling jobs market reduces some pressure on the central bank to hike, but with inflation still running at 4.2% — more than double the Fed’s 2% target — rate cuts remain off the table for now.
Economists at Citigroup warned that “while June data still seem like a stable enough labor market, we continue to think the low-hiring environment will imply further weakening in job growth and rising unemployment later in the year.”
The World Cup, hosted across 11 U.S. cities from early June through mid-July, has so far failed to deliver the anticipated boost to hospitality hiring. Feroli noted that “there continues to be no obvious sign of a World Cup jobs boost,” though some economists suggested June figures could have been worse without the tournament.