WASHINGTON — U.S. job growth slowed sharply in June, with employers adding a modest 57,000 jobs while the unemployment rate edged down to 4.2%, according to data released by the U.S. Bureau of Labor Statistics, pointing to a labor market that continued to expand but at a significantly slower pace.
Total nonfarm payroll employment increased by 57,000 during the month, broadly in line with the average monthly gain over the previous year but well below economists' expectations. The unemployment rate declined from 4.3% in May to 4.2%, while the labor force participation rate fell to 61.5%, indicating fewer people were either working or actively seeking work.
Employment gains were concentrated in professional and business services, which added 36,000 jobs. Social assistance increased payrolls by 25,000, led by hiring in individual and family services, while health care added 22,000 positions, continuing a longer-term upward trend although at a slower pace than its average over the past year. Leisure and hospitality shed 61,000 jobs, reflecting weaker-than-usual seasonal hiring, the BLS said.
Most other major industries, including manufacturing, construction, retail trade, transportation and warehousing, financial activities and government, showed little change in employment during the month, according to the agency.
Average hourly earnings for private-sector employees rose by 13 cents, or 0.3%, to $37.64 in June. Compared with a year earlier, wages increased 3.5%, suggesting pay growth remained relatively steady despite softer hiring.
The June report follows several months of stronger payroll gains and is likely to be closely examined by Federal Reserve policymakers for evidence of whether labor market conditions are cooling enough to ease inflation pressures without triggering a broader economic slowdown. Before the release, economists had generally expected hiring to moderate from May's pace.
The Bureau of Labor Statistics also noted that employment continued to trend higher in selected service industries while hiring weakened elsewhere, underscoring uneven demand across sectors. The report showed little change in several key measures of unemployment despite the decline in labor force participation.
The bureau said its next monthly Employment Situation report, covering July 2026, is scheduled for release on Aug. 7.
