June Jobs Report Shows 57,000 Payroll Gain, Unemployment At 4.2%

The U.S. economy added just 57,000 jobs in June, according to data released Thursday by the U.S. Bureau of Labor Statistics. Combined with a downward revision by a combined 72,000 jobs for the April and May jobs data, the numbers paint an underwhelming picture of the labor market, which was expected to add over 110,000 jobs in June. 

Despite this, the three-month average payroll gain is 111,000, which is stronger than any three-month average recorded in 2025. 

“The labor market still looks steadier than it did last year, but the momentum is less convincing than it looked a month ago,” Sam Williamson, a senior economist at First American, said in a statement.

The unemployment rate fell slightly in June to 4.2%, down from 4.3% a month prior, with a total of 7.1 million people unemployed. Economists attributed the decline to a shrinking labor force. 

“The number of unemployed people fell by 213,000, but the labor force contracted by 720,000, led by a pullback among prime-age workers. In other words, the lower unemployment rate reflected fewer people working or actively looking for work, rather than stronger underlying labor demand,” Williamson said. 

Employment trended upwards in professional and business services (+36,000 jobs), social assistance (+25,100 jobs) and health care (+21,500 jobs), while the leisure and hospitality sector lost 61,000 jobs. Economists said the decline in leisure and hospitality employment was a surprise given that the U.S. is currently hosting the World Cup. 

The construction sector added 11,000 jobs in June, however residential building construction lost 2,900 jobs and residential specialty trade contractors lost 5,700 jobs. The non-residential specialty trade contractor segment, however, gained 14,100 jobs in June. The real estate and rental and leasing segment lost 1,200 jobs with the majority of these losses coming specifically from real estate, which lost 1,300 jobs in June. 

“The sector details showed pockets of strength, but not enough breadth to confirm a broader hiring breakout. On the goods side, construction was the relative bright spot, adding 11,000 jobs, driven by non-residential categories, especially specialty trade contractors,” Williamson said.

For the housing industry, Williamson said the June jobs numbers keep things steady, but don’t provide any sort of boost. 

“Positive job growth still supports incomes and buyer confidence, but weaker participation and uneven sector gains do not point to the kind of labor-market momentum that would quickly unlock demand,” he said. “Life-driven moves, modest affordability improvement and rebalancing inventory should continue to support activity, but mortgage rates remain the primary constraint. That points to a gradual rebalancing, rather than a rapid rebound.”

As for what the Federal Reserve may decide to do at its meeting later this month, economists believe the report may cause the Fed to rethink a potential rate hike. 

“Overall, this report shows a job market that is a bit shakier than the May data had indicated, but inflation still remains too high,” Mike Fratantoni, the senior vice president and chief economist of the Mortgage Bankers Association (MBA), said in a statement. “MBA expects the Federal Reserve will keep the federal funds rate unchanged through the remainder of this year, but anticipates that their next move will be a hike in early 2027.”

For those still hoping for a rate cut, Williamson added that the “lower unemployment rate, low jobless claims and steady wage growth do not make a strong case for near-term cuts.”