Defying economic uncertainty, employers add 147,000 jobs in June
David Wells
(CN) — The U.S. labor market surpassed expectations by adding 147,000 jobs in June, more than the 110,000 jobs some economists had predicted.
The report released on Thursday morning by the U.S. Bureau of Labor Statistics showed a total increase in nonfarm payroll of 147,000, with state and local governments adding a combined 80,000 jobs, mostly in education.
The unemployment rate dipped down slightly to 4.1% from the previous month’s 4.2%. The number of long-term unemployed people increased by 190,000 to a total of 1.6 million, offsetting a decease from the previous month.
Federal Reserve Chair Jerome Powell recently commented to the media that interest rates would have been lowered if not for President Donald Trump’s tariffs, and the report’s steady unemployment number may delay rate cuts even further.
“Nevertheless, with the unemployment rate edging lower again, the report was better than expected and will give the more hawkish members of the FOMC reason to push back against expectations for imminent interest rate cuts,” said Bradley Saunders, North American economist at Capital Economics, talking about the Federal Reserve in an investor’s note.
Health care accounted for more than a quarter of the new jobs adding 39,000, mostly in hospitals and nursing care facilities, whereas the federal government lost 7,000 jobs.
Another bright spot was the upward revision of April and May’s jobs gains, with an additional 16,000 jobs added across the two months.
On Wednesday, the payroll company ADP released its report showing a shedding of 33,000 private sector jobs in June, with professional and business services, education and health services hit the hardest.
The private payroll drop marks the first decline since March 2023 and follows a downward revision of May’s payroll numbers to an increase of 29,000.
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month. Still, the slowdown in hiring has yet to disrupt pay growth,” said ADP chief economist Nela Richardson.
ADP’s report showed that gains were mostly concentrated in large companies with over 500 employes and that small companies with less than 50 employees shed the most jobs in June.
Pay growth numbers slightly dipped, showing annual pay up 4.4% for those staying in their jobs and 6.8% for those with new jobs, compared to last month's numbers of 4.5% for job stayers and 7% for job changers.
Layoffs and quits measured by the BLS in a report known as the JOLTS report remained stable. The data from May showed 7.8 million job openings, an uptick from April's 7.4 million.
“Despite the headline beat, we suspect underlying demand for new workers continues to recede amid growing signs of consumer spending fatigue,” wrote Wells Fargo economists Sarah House and Nicole Cervi.
Accommodation and food service showed the largest open positions with 314,000; however, in the wake of the White House’s hiring freeze, federal government openings dropped by 39,000.