WASHINGTON, D.C. — U.S. employers added just 57,000 jobs in June, far below economists’ expectations and accompanied by steep downward revisions to prior months, signaling a broad slowdown in hiring that is reshaping expectations for Federal Reserve policy and the economy’s second half.
The June gain in nonfarm payrolls missed forecasts for roughly 110,000 to 115,000 new jobs and marked the fourth straight month of moderating employment growth, according to the latest Employment Situation Report released by the U.S. Bureau of Labor Statistics.
The BLS also revised April and May payroll figures downward by a combined 74,000 jobs, lowering April’s gain to 148,000 and May’s to 129,000.
Despite the weaker hiring, the unemployment rate fell to 4.2% from 4.3%, its lowest level in a year.
The decline, however, was driven largely by Americans leaving the workforce rather than stronger hiring. The labor force participation rate fell to 61.5%, its lowest level since 2021, after roughly 720,000 people exited the labor force during the month.
The number of Americans classified as not participating in the labor force increased by 832,000.
Sector performance was uneven.
Private education and health services led job creation with 69,000 new positions, while professional and business services added 36,000 jobs. Leisure and hospitality lost 61,000 positions, one of the largest declines among major industries, while construction added 11,000 jobs and manufacturing gained 3,000.
Wage growth remained modest. Average hourly earnings rose 13 cents, or 0.3%, to $37.64. Over the past year, earnings increased 3.5%, trailing inflation forecasts near 3.9% and suggesting continued pressure on workers’ purchasing power.
The average workweek was unchanged at 34.3 hours.
Demographic data showed persistent disparities in the labor market. The overall unemployment rate for Black workers remained at 6.6%, while unemployment among young Black workers rose to 16.6%. The unemployment rate for white workers stood at 3.6%.
The softer-than-expected report prompted an immediate market reaction, pushing the U.S. dollar lower and reducing investor expectations that the Federal Reserve System will raise interest rates by September.
Acting Labor Secretary Keith Sonderling said in a statement that the administration’s economic policies have “created more than 900,000 jobs” and argued that permanent tax provisions would support manufacturing, construction and broader economic growth.
Economists, however, characterized June’s data as a period of “slack water,” with fewer workers entering or leaving jobs and hiring momentum continuing to cool heading into the second half of the year.
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