Jobs Report Released

U.S. job growth in June sharply outpaced expectations, defying predictions of a hiring slowdown amid trade and fiscal policy uncertainty. According to newly released figures, the U.S. economy added 147,000 jobs in June, surpassing the Wall Street Journal’s forecast of 110,000. The unemployment rate dropped to 4.1%, down from 4.2%.

This marks the fourth consecutive month in which employment data has exceeded economist forecasts. Notably, job figures from April and May were revised upward by 16,000, a sharp contrast to the pattern seen during the Biden administration, where jobs numbers were routinely revised downward after initial media headlines.

The largest driver of the June jobs report was public sector hiring, which accounted for 73,000 jobs. Most of these gains came from state and local governments, particularly in education. Additional strength came from the healthcare sector, which added 39,000 jobs, primarily in hospitals and residential care facilities. Social assistance services also grew, adding 19,000 positions.

In the private sector, moderate gains were seen in leisure and hospitality (+20,000) and construction (+15,000). These sectors continue to reflect resilience in consumer activity and infrastructure demand.

While state and local hiring surged, the federal workforce shrank by 7,000 jobs in June, contributing to a total decline of 69,000 federal positions since January. This ongoing contraction aligns with current efforts to streamline Washington’s bureaucracy and reduce federal overhead.

Manufacturing employment declined by 7,000, mirroring the loss in May and continuing a trend of stagnation in industrial hiring. Meanwhile, the number of long-term unemployed—those jobless for 27 weeks or more—rose by 190,000 to 1.6 million, highlighting ongoing structural challenges.

Wage growth remains solid, with average hourly earnings rising 0.2% over May and 3.7% year-over-year. Importantly, wages continue to outpace inflation, signaling real income gains, especially in blue-collar sectors.

The composition of the labor force is also shifting. According to Federal Reserve data, native-born workers accounted for all net job growth since January, adding over 2 million jobs, while foreign-born employment declined by 543,000. Though foreign-born workers—both legal and illegal—have increased by 6 million since President Biden took office, that momentum appears to have reversed under current policy shifts and enforcement posture.

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