US Job Growth Slows with Only 57,000 Positions Added in June Amid Easing Unemployment
US job growth experienced a significant slowdown in June, with employers adding only 57,000 jobs, as reported by the US Bureau of Labor Statistics. This figure marks a sharp decline from the revised 129,000 jobs added in May. Despite the slowdown, the unemployment rate decreased slightly to 4.2% from 4.3% in May, with approximately 7.1 million individuals employed.
Non-farm payrolls showed a notable decline in hiring momentum across various sectors. While employment continued to rise in professional and business services, social assistance, and healthcare, the leisure and hospitality sector saw a loss of 61,000 jobs. The report indicated that seasonal hiring was weaker than expected, even with the Football World Cup occurring in the US.
Labor Force Participation and Unemployment Trends
The labor force participation rate fell by 0.3 percentage points to 61.5% in June. This decline contributed to minimal changes in the overall number of unemployed individuals compared to May. The number of long-term unemployed, defined as those out of work for 27 weeks or more, remained at 1.9 million, although this figure is 286,000 higher than the same time last year. Long-term unemployed individuals accounted for 27.3% of all unemployed persons in June.
In terms of job creation, professional and business services added 36,000 jobs, while social assistance employment increased by 25,000, primarily in individual and family services. Healthcare added 22,000 jobs, which is below its average monthly gain of 38,000 over the previous year.
Layoff Data and Unemployment Benefits
Separate data from the US Labor Department indicated that layoffs remained low. New applications for unemployment benefits decreased by 1,000 to 215,000 for the week ending June 27, which is below the 225,000 anticipated by analysts. The four-week average of jobless claims fell by 2,500 to 222,000. However, the number of individuals continuing to receive unemployment benefits rose by 2,000 to 1.81 million for the week ending June 20.
The June jobs report was released a day earlier than usual due to the upcoming July 4 holiday. The data suggests that while hiring has slowed, the labor market remains stable. This stability may provide some relief to the US Federal Reserve, although inflation continues to exceed its 2% target. At its last policy review, the Federal Reserve maintained the federal funds rate at 3.5-3.75%. Expectations for a rate hike later this year have increased, driven by high energy prices, despite a recent decline in crude oil prices following a peace agreement between the US and Iran.
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