The US economy added 57,000 jobs in June, with the unemployment rate edging down to 4.2% and wage growth remaining solid.
Note: Data is seasonally adjusted, and the average uses a three-month moving average. Source: US Bureau of Labor Statistics.
Key Highlights from the Employment Report
The June jobs data indicates the US economy continues to withstand various pressures, including inflationary pressures stemming from the conflict involving Iran.
US businesses added 57,000 jobs last month, and the unemployment rate fell to 4.2% from 4.3% in the prior month. In recent years, economists have frequently marveled at the resilience shown by the US economy. By mid-2026, market volatility triggered by tariff increases from the previous administration has largely been absorbed, and with the Iran conflict expected to gradually ease, sustained steady economic performance may become the new normal.
Average hourly earnings for US workers rose 3.5% year-over-year, a noticeable slowdown from the peak wage growth rates seen several years ago. Wage growth has not kept pace with price increases, which is a core reason for persistently low consumer confidence. The US inflation rate fell to around 2% at one point in 2024 but is currently hovering near 4%.
On the positive side: The professional and business services sector, which saw overall employment decline through 2024-2025, has seen a steady recovery in job numbers since early 2026, adding 36,000 positions in June. Social assistance and healthcare also maintained stable job growth. Despite a boost in short-term economic activity from the World Cup, the leisure and hospitality sector shed 61,000 jobs in June. However, labor economists note that summer employment data is often volatile, likely due to seasonal adjustment factors.
This marks the fourth consecutive month of month-over-month job growth in the US, signaling a clear rebound from the sluggish job growth seen throughout 2025. Data from the US Bureau of Labor Statistics shows US businesses added only 181,000 jobs in all of 2025, far below the 1.5 million jobs added in 2024.
Jason Draho, Head of Asset Allocation Americas and an economist at UBS, described the jobs report as "decent."
He stated that the addition of 57,000 jobs aligns with the trend growth rate anticipated by most economists.
Gregory Daco, Chief Economist at EY-Parthenon, forecasts that monthly job gains will stabilize around 70,000 for the remainder of the year, with the unemployment rate potentially rising slightly but in a very limited fashion.
The US unemployment rate has remained at or below 4.5% since October 2021, marking the longest period of low unemployment since the extended economic boom of the late 1960s. However, the number of workers voluntarily leaving their jobs remains unusually low, with multiple surveys indicating people are reluctant to change jobs primarily due to a lack of confidence in finding better opportunities.
The healthcare industry, which has underpinned the job market for several years, is showing signs of moderating growth. The sector added 22,000 jobs in June, below the average monthly gain of 38,000 over the prior year.
Following persistent layoffs in 2024 and 2025, manufacturing employment is stabilizing, adding 3,000 jobs in June.
Incorporating the latest data, the US has added an average of 111,000 jobs per month over the past three months, slightly down from the previous month but a marked improvement from the job losses seen late last year.
After data revisions, manufacturing lost 2,000 jobs in May but has added a cumulative 18,000 jobs so far this year. While growth remains slow, this reverses the trend of significant layoffs in prior years.
The US dollar, sensitive to interest rate expectations, fell sharply following the jobs data release, with the dollar index extending its daily decline against a basket of major currencies to 0.5%. Market expectations have shifted from rate cuts to hikes in recent months, strengthening the dollar; this jobs data has somewhat reversed that trend. Interest rate hikes typically attract global capital to the US, thereby boosting the dollar.
The White House has not yet commented on the data, but the administration views the jobs report overall as decent.
With the overall unemployment rate stable and employment in policy-focused sectors like manufacturing stabilizing or rising slightly, this jobs data can serve as a point for the government to highlight economic achievements to the public, especially as voters grow increasingly dissatisfied with the economic situation amid persistently high inflation influenced by the Iran conflict.
Despite market concerns about artificial intelligence impacting jobs, the June data did not show mass unemployment. The information sector, including tech companies, lost 9,000 jobs, but other sectors potentially vulnerable to AI did not show weakness: professional and business services added 36,000 jobs, and finance employment remained stable.
A key question in recent months has been whether the job market rebound represents a genuine recovery or a temporary illusion that will be revised away. On the surface, the data slightly missed expectations, marking the fourth consecutive month without a six-figure monthly job gain. While this dampens some optimism, it still suggests the labor market has stabilized after last year's volatility. Adding 57,000 jobs per month is not spectacular but is decent in an environment of slowing labor force growth; despite prior downward revisions, the three-month average remains above 100,000, with solid wage growth. The current job market, while not as robust as in prior years, remains fundamentally sound.
Temporary help services are a key leading indicator for labor market turning points. After shedding jobs since early 2022 amid tight labor conditions, the sector expanded again following extremely weak hiring late last year, adding 9,000 jobs in June, primarily benefiting from improving manufacturing sentiment. Although manufacturing hiring hasn't surged yet, industry sentiment survey data has improved.
While the divergence between the establishment survey and the household survey can be confusing, it is normal. The two surveys cover different populations and use different methodologies, and the data tends to converge over the long term.
The weakness in this report lies in the household survey, which is independent of the nonfarm payroll survey. While the unemployment rate declined, the underlying picture is less optimistic than it appears: the number of employed people in the working-age population fell, and the overall labor force shrank.
The previously strong local government job gains that boosted the overall May figure were revised significantly lower, and local government employment was flat this month. Federal employment contraction halted after a reduction of 325,000 federal jobs in 2025, with federal employee counts holding steady in 2026.
The broad unemployment rate (including marginal workers and the underemployed) fell to 7.9% in May. While seemingly positive, this essentially reflects many people giving up their job search. The number of long-term unemployed (jobless for over 27 weeks) increased by 286,000 year-over-year, stemming from the "low hiring, low layoff" labor market environment of 2025.
The US unemployment rate has remained at or below 4.5% since October 2021, marking the longest period of low unemployment since the economic boom of the 1960s. However, the number of workers voluntarily quitting their jobs remains exceptionally low, with surveys showing reluctance to change jobs primarily due to a lack of confidence in finding better opportunities.
The market reaction to the jobs data has been muted so far. Slowing hiring combined with a lower unemployment rate is likely to keep the Federal Reserve on hold with its current monetary policy. US stocks rose and Treasury yields dipped slightly as markets bet the Fed is more likely to hold rates steady or even cut them, easing pressure for rate hikes.
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