U.S. job growth slowed sharply in June, with employers adding just 57,000 nonfarm payrolls even as the unemployment rate ticked down to 4.2%, the Labor Department reported Thursday.
What The June Jobs Report Showed
The Bureau of Labor Statistics said payrolls rose by 57,000 last month, well short of the 110,000 that economists polled by Reuters had penciled in. May's initial figure of 172,000 was revised down to 129,000, meaning the labor market has cooled more than the earlier data suggested. Forecasts for June had ranged widely, from as few as 25,000 jobs to as many as 200,000, underscoring how uncertain analysts were heading into the release.
Why The Slowdown Isn't Necessarily A Warning Sign
Despite the miss, the unemployment rate held steady at a low level and actually dipped to 4.2%, a sign that the labor market is still standing on solid ground. Officials and economists have described the June deceleration as something of a correction after three straight months of unusually strong hiring gains. In other words, the softer number may simply be payback for an overheated spring rather than proof of a deeper downturn.
Lining Up With Other Signals
The report's authors also noted that the slower pace could be nudging the official payrolls data closer to what other gauges of the labor market have been showing. Surveys of small business hiring intentions, for instance, have painted a more subdued picture for months, and this reading may finally be catching up to that trend rather than diverging from it.
A Report Released A Day Early
Thursday's release came a day ahead of its usual schedule because of Friday's federal holiday, which falls this year on the eve of the United States marking 250 years since its founding. The early timing meant markets and policymakers digested the numbers before the long holiday weekend, giving traders and officials one last look at the labor market before the country pauses to mark the milestone anniversary.