U.S. adds 57,000 jobs in June, far below expectations

Employers added 57,000 jobs in June, a sharp slowdown that left the unemployment rate at 4.2 percent and pushed the labor-force participation rate down to 61.5 percent, the lowest since March 2021. The Bureau of Labor Statistics released the June Employment Situation report at 8:30 a.m. ET on Thursday, July 2, 2026, showing a labor market that is still expanding, but with far less breadth than earlier in the spring.

The gains were concentrated in a few service-heavy industries. Professional and business services added 36,000 jobs, social assistance added 25,000, and health care rose by 22,000. Government payrolls grew by 8,000. Those increases were not enough to offset a 61,000-job decline in leisure and hospitality, which the Bureau of Labor Statistics said reflected slower-than-usual seasonal hiring. The June total also fell well short of the 115,000 jobs economists surveyed by Dow Jones had expected, and it came after May was revised down to 129,000 and April was cut to 148,000 after a 31,000 downward revision.

The household survey pointed to even softer footing. Household employment fell by 507,000 in June, while the number of unemployed people held at 7.1 million. Long-term unemployment rose to 1.9 million, up 286,000 over the year, and 4.7 million people were employed part time for economic reasons. Together, those figures suggest that the cooling is not confined to payroll growth alone; it is also showing up in weaker labor-force attachment and a longer time spent out of work for many job seekers.

Wages were steadier than hiring. Average hourly earnings rose 0.3 percent in June and 3.5 percent from a year earlier, both in line with forecasts. That combination gives the Federal Reserve more room to wait before making its next move, especially after its June 17 meeting kept rates in a 3.5 percent to 3.75 percent range and removed language that had suggested a bias toward future cuts. Over the next 60 to 90 days, the key test will be whether payroll growth rebounds from June’s pace, whether participation stabilizes, and whether wage gains remain moderate without feeding fresh pressure on inflation.