A weak U.S. labor market continued to expand in June, but at a significantly slower pace than economists expected, as hiring cooled and fewer Americans participated in the workforce, according to the latest jobs report released by the U.S. Bureau of Labor Statistics and a monthly employment update released last week by the Joint Economic Committee.
The economy added 57,000 non-farm payroll jobs in June, including 49,000 private-sector jobs and 8,000 government positions. While the national employment rate edged down from 4.3% to 4.2%, the improvement coincided with a 0.3 percentage-point decline in the labor force participation rate to 61.5%, indicating fewer Americans were either working or actively seeking employment.
Job gains were revised down from 172,000 to 129,000 for May, and from 179,000 to 148,000 for April.
The broader U-6 unemployment rate, which includes underemployed workers and those marginally attached to the labor force, also declined from 8.1% to 7.9%.
The U-6 rate is the U.S. government’s broadest measure of labor underutilization, measuring the percentage of the labor force that is unemployed, plus marginally attached workers and those working part-time for economic reasons.
The June report follows downward revisions to previous employment data.
The Bureau of Labor Statistics revised May’s job growth downward by 43,000 jobs, reducing the month’s gain from 172,000 to 129,000 jobs. April’s final revision, meanwhile, increased payroll growth by 33,000 jobs to a total gain of 148,000.
Among industries, private education and health services led monthly hiring with 69,000 new jobs, followed by professional and business services, which added 36,000 positions. Leisure and hospitality posted the largest decline, shedding 61,000 jobs, while the information sector lost 9,000 positions.
Over the past year, private education and health services have remained the nation’s strongest-performing sector, adding 648,000 jobs, followed by leisure and hospitality with 114,000.
Federal government employment experienced the steepest annual decline, falling by 258,000 jobs, while financial activities lost 100,000 positions.
Despite slower hiring, wages continued to outpace inflation. Average weekly earnings for all private-sector employees increased 3.82% over the past year, while average hourly earnings rose 3.52%.
Production and nonsupervisory workers saw annual increases of 3.73% in weekly earnings and 3.42% in hourly earnings.
Job Openings Hold Steady Despite Cooling Labor Market
Separate data from the Job Openings and Labor Turnover Survey showed labor demand remained relatively stable. Total job openings increased by 9,000 in May to 7.59 million nationwide, with the job openings rate holding steady at 4.6%
Leisure and hospitality recorded the largest increase in available positions, followed by trade, transportation, and utilities, while private education and health services posted the largest decline in openings.
State-level employment data reflected a mixed picture across the country. Unemployment rates declined in 20 states during May, increased in nine states, and remained unchanged in 22 states and the District of Columbia.
The District of Columbia recorded the nation’s highest unemployment rate at 6.1% while South Dakota posted the lowest at 2.1%
Payroll employment increased in 38 states and fell in 13 states during May. West Virginia recorded the nation’s largest percentage increase in payroll employment at 1.4% while Montana experienced the largest decline at 0.5%.
In May, New Jersey added 2,200 net payroll jobs, as the unemployment rate fell by 0.1 percentage point to 4.7 percent. In the prior month, New Jersey added 7,100 net payroll jobs. Over the past 12 months, the Garden State lost 3,100 net payroll jobs, and the unemployment rate fell by half of a percentage point from 5.2 percent.
New Jersey is tied for 34th in the nation for percentage gain in nonfarm payroll employment over the past 12 months.
In May, New Jersey’s private sector added 900 net private payroll jobs, and over the past 12 months it lost 300 private payroll jobs. In the prior month, New Jersey added 6,000 net private payroll jobs.
In May, employment in New Jersey rose by 11,197, and over the past 12 months it rose by 39,513.
New Jersey’s labor force participation rate rose to 63.5 percent in May from 63.4 percent and ranks 17th in the nation. In the past 12 months, the labor force participation rate has fallen by 0.1 percentage point.
Nationally, labor force participation remained at 61.8% during May before declining to 61.5% in June.
The labor force participation rate is the percentage of the civilian noninstitutionalized population age 16 and older who are employed or actively looking for work.
New Jersey ranks 17th in the nation for labor force participation, as the rate in the state rose to 63.5 percent in May from 63.4 percent in the prior month.
The 10-year high for the labor force participation rate in New Jersey was 64.7 percent, occurring in March 2023, and the 10-year low was 60.7 percent in April 2020.
The national labor force participation rate remained steady at 61.8 percent in May.
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