The unemployment rate unexpectedly fell to 4.2 percent in June as the economy added 57,000 jobs, the Department of Labor reported Thursday.
Economists had forecast 114,000 jobs and a steady unemployment rate, according to Econoday. The Trump economy beat expectations on unemployment while job growth came in below consensus.
The prior month’s payroll figure was revised down sharply — from 172,000 to 129,000. April was revised from 179,000 to 148,000. The revisions mean payrolls are 74,000 smaller than previously reported.
The private sector added just 49,000 jobs, falling short of the 123,000 forecast.
“Jobs numbers that may seem anemic compared with recent years may actually indicate healthy—even robust—growth under current conditions.”
The labor market has shifted dramatically away from immigration-driven workforce expansion. Many economists now estimate the break-even rate of job growth — the number needed to keep unemployment from rising — may be as low as zero.
By contrast, when immigration was running at higher levels from 2021 through 2024, the economy needed to add more than 100,000 jobs monthly just to keep pace with labor-force growth.
Retirements are also slowing labor-force growth, as baby boomers leave work and smaller generations fail to fully replace them.
Professional and business services employment rose by 36,000. Healthcare and social assistance added 46,600.
Leisure and hospitality employment fell by 61,000 in June — an indication the Labor Department’s seasonal adjustment expected much stronger summer hiring. Before seasonal adjustments, this sector actually added 373,000 jobs.
Manufacturing employment edged up by 3,000. Construction added 11,000.
Government employment rose by 8,000. Federal payrolls, which have been contracting under the Trump administration’s efficiency policies, rose by 2,000. State and local government employment rose by 6,000.
Average hourly earnings for all employees rose 13 cents, or 0.3 percent, to $37.64. Over the year, hourly wages are up 3.5 percent. The average workweek held steady at 34.3 hours.
The unemployment-rate decline was driven by a drop in the labor force. The labor force fell by 720,000 — from 170.078 million in May to 169.358 million in June, seasonally adjusted.
Over the past year, the non-seasonally adjusted foreign-born labor force has declined by 700,000, reflecting the Trump administration’s crackdown on illegal immigration. The number of foreign-born men in the labor force has declined by 970,000 while the number of women is up 271,000.
The native-born labor force has declined by 445,000, reflecting an aging population. Foreign-born employment has declined by 506,000 to 30.7 million. Native-born employment is down 655,000 to 132 million.
The foreign-born civilian population fell by 571,000 — from 49.135 million to 48.564 million. The native-born population rose by 2.152 million.
