Live Updates: U.S. Hiring Remains Solid, Sign of a Resilient Economy
Employers added 147,000 jobs in June, and the unemployment rate ticked down to 4.1 percent, suggesting that tariffs, interest rates and other headwinds are not yet causing employers to pull back significantly.
American employers continued hiring at a steady clip in June, brushing aside concerns about the economy to notch another month of solid job creation.
Payrolls grew by 147,000, the Labor Department reported on Thursday. The unemployment rate fell to 4.1 percent.
The healthy hiring indicates that economic headwinds — including uncertainty around the country’s tariff policy, high interest rates and mass layoffs in the federal government — are not yet causing employers to pull back significantly.
“Businesses are pretty much business as usual,” said Beth Ann Bovino, the chief economist at U.S. Bank. They may not be expanding, she added, but they still have to “keep the doors open day to day, and that means they’ve got to have their workers in place.”
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Holding pattern: Many companies appear to be in a holding pattern as they assess the effects of President Trump’s economic policies, geopolitical conflicts and other uncertainties. Industries broadly continued to add jobs, but at a very low level, suggesting they have largely postponed any hiring plans.
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Revised spring: The number of jobs created in April and May was revised up by a combined 16,000, reaffirming the labor market’s resilience.
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Signs of strain: Below the headline numbers, there are some signs of weakness. Private-sector hiring was largely concentrated in just a few industries — health care, leisure and hospitality and government. The labor force also shrank.
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Government shake-up: The federal government lost 7,000 jobs in June, but state and local governments added a combined 80,000 jobs. That raises the possibility that some of the 69,000 who have left the federal government since January are moving to other government jobs with cities and states.
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Wages rise: Average hourly earnings rose 0.2 percent in June and are up 3.7 percent compared with the same time last year.
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Fed watching: The Federal Reserve, which has been under pressure from Mr. Trump to cut interest rates after holding them steady for months, has shown no urgency to cut interest rates given the labor market’s continued strength. This report reinforces the Fed’s stance.
A stable labor market fortifies the Federal Reserve’s case that it does not need to be in a hurry to lower borrowing costs, keeping the central bank on course to extend its pause on interest rate cuts when it meets later this month.
June’s jobs report, which showed employers adding 147,000 jobs for the month and the unemployment rate ticking down to 4.1 percent, underscores the economy’s resilience and helps to dispel the notion that it is in need of immediate support.
“There is no urgency,” said Priya Misra, a portfolio manager at J.P. Morgan Asset Management. “They can keep pushing it out in the future,” she added on the timing of the Fed’s next rate cut.
The latest sign of a relatively sturdy labor market comes as President Trump directs a litany of attacks at Jerome H. Powell, the Fed chair, and the central bank more broadly for resisting his demands to immediately lower borrowing costs by a significant amount.
Just in the last week, Mr. Trump called on Mr. Powell to resign and penned him a handwritten note blaming him for costing the country a “fortune.” Part of the president’s ire stems from the Fed keeping interest rates at current levels at a time when the government is trying to pass a massive package of tax cuts that is expected to balloon the deficit and increase what it costs the government to cover interest payments on the national debt.
Already, the United States spends around $1 trillion a year to service those obligations.
Mr. Powell has so far remained undeterred, telling an audience of policymakers, economists and investors at the European Central Bank’s annual conference in Sintra, Portugal, on Tuesday that as long as the economy is in “solid shape,” the central bank thought it “prudent” to wait and collect more data about how the economy is evolving in light of Mr. Trump’s policies before taking any action.
Asked directly about the president’s pressure campaign on Tuesday’s panel, Mr. Powell said he was “very focused on just doing my job.”
To restart interest rate cuts after an extended pause, which has been in place since January, officials at the Fed have laid out clear criteria. Either inflation, which is still elevated and at risk of moving higher because of tariffs, appears well enough contained or the labor market starts to meaningfully weaken.
Inflation has stayed surprisingly mild in recent months, but most economic forecasters expect price pressures from Mr. Trump’s tariffs to accelerate this summer. The threat of new levies continues to hang over the country’s trading partners as the administration races toward a July 9 deadline to mint various deals. On Wednesday, Mr. Trump announced a preliminary pact with Vietnam.
Tariffs are expected to raise inflation and also hurt growth, but Fed officials have started to diverge in terms of what the magnitude of the economic fallout might be. That has caused divisions regarding the timing of when the central bank should restart interest rate cuts, with two Trump-appointed officials in recent weeks making the case for a July cut if inflation stays muted.
But other policymakers do not appear to be on board. Projections released in June showed that almost half of Fed officials forecast no cuts at all this year. A slim majority stuck to earlier estimates of half a percentage point worth of cuts.
Thursday’s jobs report wiped out any expectation that the Fed will lower interest rates in July, according to the federal funds futures market, and pushed back the projected timing of the first reduction to October.
But economists have no yet ruled out interest rate cuts this year altogether. That is because there are nascent signs that the economy, while still solid, is slowing down.
Private-sector hiring slowed in June overall, and the range of sectors still adding jobs stayed narrow. Health care, leisure and hospitality and state government accounted for a large share of the gains. The labor force also shrunk.
One complication is that getting a clear read on the health of the labor market is likely to get more difficult in light of sweeping efforts by the Trump administration to limit the flow of people entering the United States, as well as its campaign to drive out immigrants already deeply rooted in the country.
Monthly jobs growth is expected to slow, but later this year a more significant pullback in the pace may simply reflect a smaller labor force as opposed to weak demand for workers.
Ms. Misra warned that immigration restrictions, coupled with tariffs, are likely to exacerbate price pressures, giving the Fed another reason to stand pat.
“They’re going to want to see more data,” she said.
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The White House celebrated the new jobs numbers. Karoline Leavitt, the White House press secretary, said the report showed the economy was “booming” and predicted it “will only get better” once the House finalizes the president’s domestic policy package.
Stocks opened higher on Thursday, with the S&P 500 rising 0.5 percent at the start of the trading day. Worries that the jobs data might show an economy beginning to crack were eased by continued signs of solid hiring in June.
Job growth last month was driven by state and local government employment. Private education and health also contributed. But the manufacturing sector shed jobs in June, the same number the industry lost the month before.
Stephen Miran, the chair of the White House Council of Economic Advisers, framed today’s jobs numbers as a repudiation of economists who had predicted the president’s tariffs and other policies would result in lost jobs and rising prices. Appearing on Fox News, Mr. Miran said the report, which beat expectations, is “once again proving that the haters and doomsayers don’t know what they’re talking about.”
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I often get questions about whether we should still trust government economic data, given President Trump’s past criticism of official statistics and willingness to break longstanding norms. My answer is yes — but that there are real concerns about the long-term reliability of government statistics in an era of shrinking budgets and falling survey response rates. I addressed this in more depth in our coverage of last month’s jobs report.
Some people are also pointing out that today’s numbers differ sharply from the ones put out yesterday by ADP, the private payroll processor, which showed that private-sector employment fell by 30,000 in June. But that kind of divergence isn’t unusual — ADP’s estimates frequently differ from the government’s numbers.
Stocks have nudged higher but the move is small. The data continues to show a resilient labor market which is positive for the broader economy but is likely to keep the Fed from quickly lowering interest rates.
Teen unemployment increased to 14.4 percent in June, up from 12.3 percent last year. This continues the trend of rising teen joblessness.
If you squint, you can find things in this report to be concerned about. Private-sector hiring slowed, especially outside of health care. The labor force shrank. The number of people who have been out of work for more than six months rose. But the big picture remains one of surprising resilience — strong job growth, low unemployment and little sign that tariffs and uncertainty have so far derailed the labor market.
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As the Trump administration ramps up deportations, one number I’ve been watching is the number of foreign-born people with jobs. It has now been dropping since March, and the run-up in the share of the workforce that is foreign born appears to have stalled.
The average workweek ticked down by 0.1 hours, to 34.2 hours in June. That could be a sign that employers are cutting worker hours even as they are reluctant to lay anyone off.
Job growth was fairly narrow last month. Health care, leisure and hospitality and state government accounted for a large share of the gains, as they have consistently in recent months. The “diffusion index,” which measures whether industries are adding or cutting jobs, shows roughly an equal split between growing and shrinking industries.
Although the overall unemployment rate remained steady, the rate for Black or African American workers jumped to 6.8 percent, from 6 percent. That number can be noisy, but wider increases in joblessness can start among populations that are historically marginalized in the labor market.
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The data has wiped out any expectation that the Fed could cut in July. October is now the first meeting where investors expect a full quarter point cut to interest rates.
There are some signs that the trade war is filtering into the economy. The manufacturing industry lost 7,000 jobs.
To firm up that picture, the purchasing managers index for manufacturing included a very downbeat reading for employment last month. One comment read: “Tariffs, chaos, sluggish economy, rising prices, Ukraine, Iran, geopolitical unrest around the world — all make for a landscape that is hellacious, and fatigue is setting in due to dealing with these issues across the spectrum.”
The health care sector once again dominated job growth last month, accounting for more than a quarter of month’s gains. As my colleagues Lydia DePillis and Christine Zhang reported in a story today, health care has become an increasingly central part of the economy in recent decades.
It’s interesting to see state and local government still surging ahead, adding a collective 80,000 jobs last month. It’s possible that some of the 69,000 people who’ve left the federal government since January have found work with cities and states.
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The better-than-expected jobs report reinforces the Federal Reserve’s stance that it can afford to be patient with interest rate cuts. Since January, the central bank has adopted a “wait-and-see” approach to policy moves, after reducing borrowing costs by a percentage point. Officials have argued that so long as the economy stays solid, it is prudent for them to move gradually given the uncertainty that President Trump’s policies have injected into the economic outlook. His tariffs are expected to raise inflation while hurting growth, although the impact so far has been muted.
The 147,000 jobs added in June was roughly the same as the monthly average over the prior 12 months.
The unemployment rate ticked down in June, but the labor force also shrank by 130,000.
The stronger than expected data has given an immediate lift to government bond yields. Government bond yields are effectively like interest rates that underpin borrowing across the economy. The 10-year Treasury yield rose to 4.35 percent, from 4.28 percent, a big move in that market.
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Average hourly earnings rose 0.2 percent for the month and are up 3.7 percent compared to the same time last year.
April and May’s job gains were both revised up slightly, by a combined 16,000 jobs.
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