US Job Growth Cools Sharply in June as Payrolls Rise Just 57,000

The US labor market slowed markedly in June, with nonfarm payrolls rising by just 57,000, according to the Bureau of Labor Statistics. That was well short of the roughly 115,000 economists had expected and down from a downwardly revised 129,000 in May. Job gains for April and May were cut by a combined 74,000, underscoring a cooling trend. The unemployment rate unexpectedly edged down to 4.2% from 4.3%, but the decline was driven largely by people leaving the workforce: the labor force participation rate fell to 61.5%, its lowest since 2021. Professional and business services led hiring with 36,000 jobs, followed by social assistance and health care, while leisure and hospitality shed 61,000 amid weaker seasonal hiring. Average hourly earnings rose 0.3% on the month and 3.5% over the year. Markets reacted quickly, with stock futures rising, Treasury yields falling and traders trimming expectations for a Fed rate increase as soon as September. Fed officials next meet at the end of July.