US job growth slows to 57,000 in June, unemployment rate drops to 4.2%
Washington DC, July 2
The US job growth slowed in June as data from the Bureau of Labor Statistics showed that non-farm payrolls increased by 57,000 jobs compared to a revised 129,000 in May.
However, the US unemployment rate dropped to 4.2 per cent, pointing to a stable labour market as hiring stabilised amid growing investments in artificial intelligence.
"Employment continued to trend up in professional and business services, social assistance, and health care. Leisure and hospitality lost jobs," the bureau said in its release.
There was little change in both the unemployment rate and the number of unemployed people from the May numbers. A total of 7.1 million people were unemployed in June. The reduced labour force participation led to stability in the unemployment rate.
The labour force participation rate decreased by 0.3 percentage point to 61.5 per cent in June.
Those who have been unemployed for a longer period (27 weeks or more) stayed at 1.9 million, changing little in June but grew by 286,000 over a year.
"The long-term unemployed accounted for 27.3 per cent of all unemployed people in June," the data showed.
Sector-wise, professional and business services added 36,000 jobs in June while social assistance added 25,000 jobs, primarily in individual and family services. Healthcare employment continued to grow, adding 22,000 jobs in June but staying below the monthly average of 38,000 in the prior 12 months. Leisure and hospitality employment declined by 61,000 in June, reflecting weaker-than-usual seasonal hiring despite the Football World Cup happening in the US.
A stable jobs market gives respite to the US Federal Reserve, but the inflation rate that has been above its comfort level of 2 per cent is going to weigh on any policy decision.
In the last month's policy review, the federal funds rate was maintained at 3.5-3.75 per cent. However, expectations of a hike this year have gained traction on the back of high energy prices despite a drop in crude oil prices after the US and Iran struck an interim peace agreement.
— ANI
Reader Comments
The long-term unemployed numbers (1.9 million for 27+ weeks) are worrying. Even in a developed economy like US, people are struggling. Makes you appreciate the resilience of Indian economy where we have more informal employment safety nets. But we need better data and policies too.
As someone working in Bangalore's tech sector, I watch these numbers closely. The Fed maintaining rates at 3.5-3.75% while inflation stays above 2% is a tricky balance. For Indian IT exports, a stable US economy is crucial. Hope this slowdown is temporary.
Leisure and hospitality losing 61,000 jobs despite the Football World Cup? That's surprising. Maybe people are spending less on travel and eating out due to high inflation. For Indian tourists planning US trips, this might mean cheaper flights and hotels if demand drops. Every cloud has a silver lining! 😄
Respectfully, I think the article downplays the significance of 7.1 million unemployed Americans. That's roughly equal to the population of a small Indian state. The Fed's focus on inflation at 2% seems rigid when real people are struggling with job insecurity. India should learn from this - we need strong social safety nets before chasing growth numbers blindly.
Healthcare adding 22,000 jobs is good, but below the 38,000 monthly average - shows even essential sectors are slowing. Meanwhile, AI investments are booming. As an Indian tech professional, I worry about automation replacing jobs both in US and India. We need to upskill our workforce fast. Modiji's digital India initiative should focus on AI training too.