US job growth slowed more than expected in June
The US economy added far fewer jobs than expected last month, with just 57,000 added in June, according to Bureau of Labor Statistics data released Thursday.
June’s tally is a cooldown from May’s gains of 129,000 jobs and came in well below economists’ expectations for 100,000 jobs to be added. The unemployment rate dropped to 4.2% from 4.3%.
Thursday’s report showed that leisure and hospitality businesses shed 61,000 jobs last month, reflecting weaker-than-usual seasonal hiring, the BLS noted in the report.
That sector — which is closely watched as a gauge for consumer health, since it can be tied to discretionary spending — was expected to be a wild card: Economists were unsure as to how much World Cup-related events lifted hiring in May and June.
June’s job gains were driven (once again) by healthcare, an industry buoyed by an increasingly aging US population. Healthcare and social assistance added 46,600 jobs last month.
Professional and business services jobs increased by 36,000 last month, while industries such as construction (+11,000 jobs) and manufacturing (+3,000 jobs) ticked up. In addition to leisure and hospitality, jobs were shed in industries such as information (down 9,000 jobs) and retail trade (down 7,500 jobs).
Still, more industries added jobs than lost them, and employment growth is running at a significantly faster tick than last year.
“The acceleration in employment gains in the first half of this year, averaging 92,000 per month versus the paltry average of just 10,000 per month last year, both reflect and support strong economic activity in the US, particularly providing underpinning for continued solid consumer spending,” Kathy Bostjancic, Nationwide chief economist, wrote in a note Thursday.
Not only were employment gains softer in June, but the unemployment rate dropped as fewer people were in the labor market. Labor force participation dropped to a five-year low of 61.5% last month, falling from 61.8% in May.
“That decline in participation had been concentrated among older workers, perhaps because big stock market gains were prompting a wave of early retirements,” Pantheon Macro economists Samuel Tombs and Oliver Allen wrote in a note Thursday. “But prime-age participation fell sharply last month too.”
The labor market has been contending with a range of headwinds, including an aging demographic, the rapid adoption of AI, and a recent spike in oil prices from the war in the Middle East.
This story is developing and will be updated.