June Jobs Report Shows Hiring Slowdown as Unemployment Dips to 4.2%

The US economy added just 57,000 jobs in June, a sharp slowdown from the downwardly revised 129,000 added in May, according to the Bureau of Labor Statistics. The unemployment rate ticked down to 4.2%, but economists cautioned that the decline was driven mainly by a falling labor-force participation rate, which slid to 61.5%, its lowest level since March 2021, rather than by a genuine pickup in hiring.

The report capped a year in which the unemployment rate has drifted within a narrow band, from 4.3% in January to 4.4% in February before settling back down through the spring and early summer. Taken together, economists describe the labor market as cooling gradually rather than deteriorating sharply, with fewer people entering or staying in the workforce than actively losing jobs.

The soft payroll number added to the case some Fed officials have made for eventual rate cuts, even as inflation concerns have kept the central bank from moving in that direction so far this year.

Sectors including healthcare and government continued to account for a disproportionate share of job gains, while goods-producing industries showed little momentum for much of the first half of the year.