Joe Raedle/Getty Images
- The US added 147,000 jobs in June, surpassing the expected 111,000.
- Economists expected an uptick in unemployment, but it dropped to 4.1%.
- Federal Reserve Chair Jerome Powell said in June that job market conditions have been solid.
The US added 147,000 jobs in June, exceeding expectations, and unemployment unexpectedly cooled to 4.1%.
Economists expected job growth of 111,000 and for unemployment to increase from 4.2%, which it had been for three consecutive months, to 4.3%.
May's job growth was revised from 139,000 to 144,000, and April's job growth was revised from 147,000 to 158,000. That means there were 16,000 more jobs created than previously thought.
Wage growth was still fairly strong, but has cooled down. Average earnings increased from $35.00 an hour in June 2024 to $36.30 an hour a year later, a 3.7% rise following recent 3.8% and 3.9% increases. Average earnings rose by 0.2% over the month, from $36.22 an hour.
"Even if jobs growth has remained solid overall, the fact that we are seeing slower wage growth may point to the fact that workers have less power and less leverage in negotiating a raise, whether internally or when they're switching jobs," Daniel Zhao, the lead economist at Glassdoor, said.
Labor force participation edged down from 62.4% in May to 62.3% in June. Employment increased in government, with a 63,500 increase in state and local government education. Employment dropped in private educational services but increased in healthcare and social assistance. Employment fell in manufacturing and the professional and business services sector.
Cory Stahle, an economist at the Indeed Hiring Lab, said while the job market is resilient, it's not providing equal opportunities because hiring is concentrated in just a few industries.
"If you're in one of the industries that's hiring right now and adding jobs, you're feeling, probably, pretty good," Stahle said. "If you're outside of that, you're going to have a lot fewer opportunities. It's going to be much more discouraging."
While the unemployment rate fell, long-term unemployment, or people who have been unemployed for at least 27 weeks, increased.
The Fed decided about two weeks ago to hold interest rates steady again. Federal Reserve Chair Jerome Powell said on June 18, after the rate announcement, that the job market is solid, with low unemployment and moderating wage growth that exceeds inflation.
The next rate decision will be toward the end of July. New inflation data and other measures will be released before the members determine what to do next with interest rates. CME FedWatch, which shows the chance of a rate outcome based on market moves, indicated after Thursday's release a 95% chance that rates will be held steady again, up from a 75% chance before the report. Powell has repeatedly said President Donald Trump's tariffs have been one reason rates haven't come down yet.
"We went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs," Powell said at a European Central Bank panel earlier this week.
He added that the "prudent thing to do is to wait and learn more and see what those effects might be" before reacting, as long as the economy is solid.
While the job market has shown some strength, it has been unfavorable for job seekers, and it can be tough for recent college graduates to get hired easily. Just 29% of consumers surveyed by The Conference Board said jobs were "plentiful" in June.
"So far, layoffs have not surged wildly, but hiring has cooled," Mark Hamrick, senior economic analyst for Bankrate, told Business Insider toward the end of June. "The outlook is for more of this in the coming months."
Softer spending and a worse-than-expected real GDP reading show there are economic headwinds, but the US isn't officially in a recession.