Job market shows signs of cooling as gains fall below expectations
The U.S. labor market added 57,000 jobs in June, the U.S. Bureau of Labor Statistics reported Thursday. This figure is well below analysts’ expectations of about 115,000 job gains, and points to slower hiring but not a sharp rise in layoffs.
Thursday’s report is another sign that the labor market is cooling after stronger gains earlier this year. Employment was likely impacted by high inflation, high interest rates and the expectation of a rate hike by the Federal Reserve this fall.
The unemployment rate in June was 4.2%, with 7.1 million unemployed people, only a slight drop from May.
Average hourly earnings in the private sector rose 13 cents in a month to $37.64. Over the past year, average hourly earnings rose 3.5%, trailing the latest available annual inflation rate of 4.2% in May. That gap helps explain why many workers still feel squeezed and report low consumer confidence.
The economy gained jobs in professional and business services, social assistance, and health care.
Employment declined in leisure and hospitality, which lost 61,000 jobs, a weaker-than-usual seasonal hiring.
Mixed signs from other data
Thursday’s monthly jobs report follows other labor market data released this week that showed conflicting signals about the U.S. labor market.
Data from the monthly Job Openings and Labor Turnover Survey, known as JOLTS, released Tuesday showed that job openings edged up to about 7.6 million in May, a two-year high.
Meanwhile, hires, total job separations, quits, layoffs and discharges remained mostly unchanged from April to May.
Separately, U.S.-based employers announced 45,849 job cuts in June, a 53% drop from May, according to a report released Wednesday by Challenger, Gray & Christmas, an outplacement firm.
The June total was down 4% from the number reported in the same month last year, and marked the lowest monthly total since December 2025, the report said.
However, the Challenger report showed that hiring also fell in June, with U.S. employers announcing plans to hire roughly 11,000 workers, a 44% decrease from announced hires in May.
Artificial intelligence was the leading reason employers cited for job cuts, the report said.
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Ella Rae Greene, Editor In Chief
