The U.S. economy added just 57,000 nonfarm jobs in June, a sharply disappointing figure well below expectations and among the weakest monthly readings in recent years, the Bureau of Labor Statistics reported.
The national unemployment rate held at 4.2%, according to BLS. The combination of anemic job growth with a stable unemployment rate suggests that labor force participation may also be declining, as discouraged workers stop actively seeking employment.
Leisure and hospitality, historically a leading job growth sector during economic expansions, recorded net job losses in June, the BLS data showed. The reversal in a sector that typically adds jobs even during periods of moderate growth signals broader softness in consumer-facing industries.
Real average hourly earnings increased 0.8% in June as monthly consumer price declines temporarily boosted workers’ purchasing power, according to BLS. However, economists cautioned that the wage gains reflected falling prices rather than accelerating pay growth.
The June data continues a trend of decelerating monthly payroll growth that has concerned economists and Federal Reserve policymakers. Monthly job gains have steadily declined from levels above 200,000 earlier in the expansion to levels now approaching stagnation.
The weak jobs report intensifies pressure on the Federal Reserve to reconsider its interest rate stance at upcoming policy meetings. The central bank has maintained elevated rates to combat inflation, but softening employment data strengthens the case for rate reductions.
The report is expected to fuel bipartisan debate in Congress about whether the economy is softening more rapidly than government forecasters and the administration have publicly projected.