America’s Job Creation Report Card Disappoints

Just like a dad after kicking back a couple cold ones at the lake house, the economy is still putting people to work, but at a much slower pace. The US added 57,000 jobs last month, the government said yesterday, about half of what analysts projected.

April and May jobs numbers were also revised down to 148k and 129k from 179k and 172k, respectively. Still, job creation is up compared to last year’s lull: Employers have added an average of 92k jobs per month this year, compared with losing an average of 8k each month in the second half of 2025.

Here’s where head counts rose and fell last month:

• Restaurant, bar, and hotel employment shrank by 61,000, bucking predictions of a World Cup boost, with some economists saying this may be a sign that lower-income consumers are pulling back on leisure spending.
• Construction and manufacturing payrolls grew by 11,000 and 3,000, respectively, potentially reflecting the ongoing AI data center buildout.
• Healthcare and social assistance continued to be a major employment engine, adding almost 47,000 payrolls.

Meanwhile, the average wage growth of 3.5% was outpaced by 4.2% annual inflation.

Fewer unemployed and fewer workers

Despite the hiring slowdown, a smaller pool of job hunters—as well as relatively few layoffs—is keeping unemployment low. The unemployment rate ticked down to 4.2% last month from 4.3% in May, due in part to the number of people working or looking for a job declining by 720,000. While experts say the shrinking labor force could just be a data quirk, it may also be caused by harsher immigration policies and baby boomer retirements.

Looking ahead…stocks initially rose yesterday, since weaker job growth also weakens the odds that the Federal Reserve will raise interest rates, but ultimately finished the day flat. Trading odds of an interest rate hike happening this month dropped to below 18% yesterday, from 28.9% the day before.—SK

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