June Employment Report Released
The U.S. labor market added 147,000 jobs in June, significantly surpassing economists’ expectations of a 110,000 gain, according to data released Friday. The unemployment rate dropped to 4.1%, down from 4.2%.
It marks the fourth consecutive month in which employment figures exceeded forecasts, reinforcing the underlying strength of the economy despite persistent concerns over trade instability and fiscal uncertainty.
Revisions to previous reports also tell a different story than in recent years. Unlike prior trends under the Biden administration—where job figures were routinely revised downward post-headlines—both April and May were revised upward by a combined 16,000 positions.
Public sector hiring accounted for nearly half of the job gains in June, contributing 73,000 jobs. The majority were in state and local government, heavily concentrated in education. Healthcare added 39,000 jobs, primarily in hospitals and residential care. Social services chipped in 19,000 jobs, while construction and hospitality—key private-sector segments—added 15,000 and 20,000 jobs respectively.
Federal government employment continued its decline, shedding 7,000 positions in June. Since January, the federal workforce has contracted by 69,000 jobs—a trend likely to be welcomed by advocates for smaller government.
Not all sectors showed strength. Manufacturing lost 7,000 jobs, mirroring May’s losses, suggesting continued weakness in industrial output.
Wage growth remained steady, with average hourly earnings up 0.2% month-over-month and 3.7% year-over-year. These increases outpaced inflation, continuing a trend noted in prior reports. Blue-collar wage growth, in particular, continues to show resilience.
A demographic shift in employment patterns is also emerging. Since January, native-born employment has increased by over 2 million, while foreign-born employment has declined by 543,000. This data, cited by the Federal Reserve, highlights a reversal in the hiring trends seen earlier in the Biden administration, during which the foreign-born workforce surged by 6 million.
Despite the headline numbers, the report is not universally positive. Long-term unemployment rose by 190,000 in June, now totaling 1.6 million Americans. Additionally, while the job gains are notable, a significant share originated in government-funded or government-adjacent sectors, raising questions about the private sector’s overall momentum.