U.S. employers reduced their hiring pace last month, and the unemployment rate declined slightly to 4.2%, while labor force participation fell to its lowest level in over 5 years.
The U.S. economy added 57,000 jobs in June, significantly below economists’ expectations of 110,000 jobs. The disappointing total ended a three-month streak of job gains that exceeded expectations and gave hope that the labor market was breaking out of a low-hire, low-fire pattern that had suppressed job growth last year.
Growth was strongest in the healthcare sector with an increase of 47,000 jobs, followed by professional and business services with 36,000 new positions, and private education adding 22,000 jobs. The information sector experienced the weakest growth, losing 9,000 jobs and reportedly declining in payrolls for 17 of the past 18 months. Additionally, retailers reduced their workforce by 7,500 jobs.
Long-term unemployment, people unemployed for at least 27 weeks, slightly decreased in June but remains above 27%. Last month, 1.9 million individuals had been unemployed for nearly 7 months or more, an increase of 286,000 from last year.
The labor force participation rate, or the share of the population who are working or actively seeking employment, fell to 61.5%, its lowest since March 2021.
In June, the labor force participation rate for individuals in their prime working years dropped to 83.3%, indicating that the decline wasn’t solely caused by aging workers.
“The June jobs report wasn’t quite as peppy as the prior three reports, but it still points to overall general health in the labor market,” J.P. Morgan economist Michael Feroli wrote in a note to clients. “Before today’s revisions, the nonfarm job growth figures over the March-May period stood out among other job data as exceptionally strong, and so we see today’s modest setback as merely a normalization back to a still-decent trend.”
By CEO NA Editorial Staff
