WASHINGTON — U.S. employers added far fewer jobs than expected in June as hiring slowed sharply, the Labor Department said on Thursday, even as the unemployment rate edged lower amid persistent high inflation.
Nonfarm payroll employment rose by just 57,000 in June, well below economists' forecasts of around 110,000 to 115,000 and down from a downwardly revised 129,000 in May, according to the department's Bureau of Labor Statistics.
The unemployment rate fell to 4.2% from 4.3% in May, with the number of unemployed people changing little at about 7.1 million.
The report comes as consumer prices remain elevated, with the annual inflation rate at 4.2% in May, its highest level since April 2023.
Employment continued to trend up in professional and business services, social assistance, and health care, the BLS said. Leisure and hospitality lost jobs.
Average hourly earnings for all employees on private nonfarm payrolls rose in June, with year-over-year wage growth around 3.5%, according to economists tracking the data.
The labor force participation rate decreased by 0.3 percentage point to 61.5%, while the employment-population ratio edged down to 59.0%.
The June figures mark a significant cooling in the labor market after stronger gains earlier in the year, though revisions to prior months also showed softer growth. Economists will watch closely for implications on Federal Reserve policy as officials balance cooling employment with sticky inflation.
The data are based on surveys conducted in mid-June and are subject to revision in coming months.
