U.S. Nonfarm Payrolls Rose 57,000 in June, Below Expectations

U.S. nonfarm payrolls rose by 57,000 in June, a figure that came in below the consensus expectation of a 113,000 gain. This latest report suggests a potential deceleration in the nation's labor market. Furthermore, payroll gains for April and May were revised downward by a combined 74,000, resulting in a net decline of 17,000 jobs when accounting for these revisions.

Private sector payrolls advanced by 49,000 in June, though prior months also saw downward revisions totaling 50,000. Key sectors contributing to job growth in June included health care and social assistance, which added 47,000 positions, and professional and business services, up by 36,000. Manufacturing employment saw a modest increase of 3,000, while government payrolls grew by 8,000.

The unemployment rate unexpectedly declined to 4.2% in June. Average hourly earnings, a key measure of wage inflation, increased by 0.3% for the month and are up 3.5% over the past year. Aggregate hours worked saw a 0.1% rise in June, representing a 0.9% increase year-over-year.

Despite the June slowdown, the U.S. employment picture has shown notable strengthening during the first half of 2026, with an average monthly gain of 92,000 jobs. This compares favorably to the average of just 10,000 jobs per month recorded in 2025. While concerns about artificial intelligence (AI) impacting employment persist, data tracking AI-related job losses indicates approximately 127,000 jobs lost since the beginning of 2025. This figure, while significant, remains a small fraction of the approximately 162 million people currently employed in the U.S.

Examining the details, job gains in June were predominantly driven by health care and social assistance, and professional and business services. Notably, payrolls excluding government, health care, and education sectors, which are often influenced by policy, saw a decrease of 20,000 in June. Federal government payrolls, despite a 2,000 increase in June, have seen a substantial decline of 323,000 since the beginning of the Trump Administration. This reduction, excluding decennial census effects, represents the steepest seventeen-month decline in federal payrolls since the post-World War II period. Looking ahead, continued job gains are anticipated in the coming months. In related economic news, initial jobless claims decreased by 1,000 last week to 215,000, while continuing claims rose by 2,000 to 1.814 million.

Key terms:

1. Nonfarm payrolls: A widely watched statistic representing the total number of paid employees in the U.S. economy, excluding farm workers, private household employees, and non-profit organization employees.

2. Unemployment rate: The percentage of the total labor force that is unemployed but actively seeking employment and willing to work.

3. Average hourly earnings: A measure of the average amount of money earned per hour by employees, used to gauge wage growth and inflationary pressures.