US employers still reluctant
By Christopher Rugaber AP Economics Writer
Washington (AP) — U.S. employers slowed hiring last month and added only 57,000 jobs, less than half the previous month’s total and a sign companies still have a cautious economic outlook.
The Labor Department said Thursday that the unemployment rate declined to a low 4.2% from 4.3% in May, though the drop mostly occurred because many people out of work gave up looking and were no longer counted as unemployed.
The figures suggest businesses remain wary of the economy’s health, with inflation at a three-year high and consumer confidence near post-pandemic lows. The job market has been stuck in a “low-hire, low-fire” rut in which the employed enjoy some job security with layoffs low, but those out of work are struggling to get hired. Strong hiring in the spring raised hopes the economy was escaping that dynamic, but Thursday’s report suggests job gains are still muted.
US employers still reluctant
“We are in a market that is still very fragile, and still susceptible to shocks happening,” Nicole Bachaud, labor economist at ZipRecruiter, an online job platform, said. “There is still a lot of hesitation on the part of employers and workers themselves to make any moves.” She noted that other government data shows companies are posting more jobs but not filling them.
Hiring has improved from last year, when employers added fewer than 10,000 jobs a month, on average. In this year’s first half the pace improved to 92,000. Yet healthy job gains that were initially reported in April and May were revised lower, from 172,000 down to 129,000 in May and from 179,000 to 148,000 in April.
Restaurants and bars cut jobs last month, despite the World Cup
Restaurants, bars, and hotels cut 61,000 jobs, a sharp disappointment for those who expected the World Cup tournament that is taking place in multiple U.S. cities would lead to at least temporary job gains. Retailers also shed 7,500 jobs.
Chad Moutray, chief economist at the National Restaurant Association, said member companies are seeing signs consumers are pulling back on eating out, particularly outside higher-income households. It reflects a “K-shaped” economy, where wealthier households pull ahead of middle- and lower-income ones.
“We continue to hear that a lot of Americans are struggling to make ends meet,” he said. “If you’re catering to the upper-end of the K, you’re doing fine. If you’re catering to the lower part of the K, you’re seeing some challenges in the last couple of months.”
US employers still reluctant
Moutray’s group has forecast that restaurants will hire 450,000 seasonal workers this summer, slightly below last year’s 470,000.
Denise Beckson, a vice president at Morey’s Piers and Beachfront Water Parks in Wildwood, New Jersey, said her company has hired about 1,500 summer employees this year, roughly the same as last year. But she said many restaurants and hotels are struggling with higher food costs and minimum wage increases that have limited their ability to hire.
“Costs continue to rise, and one way to control that is to pull back on staffing,” she said.
Many Americans worry about the impact of artificial intelligence on employment, but for now AI may actually be adding jobs. Last month professional and business services, a category that includes architecture, engineering, and software development — occupations expected to be vulnerable to AI — added 36,000 jobs.
Construction firms added workers, possibly because of AI buildout
Blue-collar industries added a modest number of jobs, with manufacturers adding 3,000 positions and construction firms 11,000.
US employers still reluctant
Scottsville, New York-based Power & Construction Group added some of those jobs as it seeks to keep up with the demand for greater electrical capacity in the state. Thomas “Murph” Murphy, the company’s vice president, said they are looking to hire another 15-20 workers after adding 47 in the past two months.
The company is seeking more electricians, laborers, and heavy equipment operators to join the 350 workers on staff, Murphy said.
Murphy said his company is competing for workers with firms building data centers in other states — not many are being built in New York — and he has to work to convince young people to choose construction as a career. The firm recently built a training center to bring newer, younger workers up to speed.
“The grid can’t handle all the new power that everybody’s using,” Murphy said, noting the increase in laptops, phones, and tablets in many Americans’ homes. “We need to continuously build the grid. But it does take time.”
Jobs data could keep Federal Reserve on sidelines
US employers still reluctant
Thursday’s report suggests that hiring and wage gains aren’t accelerating enough to worsen inflationary pressures in the economy, which could allow the Federal Reserve to keep its key rate unchanged at its current level of about 3.6%.
Previously, many Wall Street investors had expected the central bank to lift its key rate this year as hiring appeared to be accelerating. The prospect of no rate cuts lifted the stock market in mid-morning trading, with the broad S&P 500 index up 0.7%.
“Today’s data hit the sweet spot for markets — strong enough to keep worries about growth at bay, but soft enough to reduce the probability of a rate hike,” said Eric Winograd, chief U.S. economist at AB Global, an asset management firm.
Fed chair Kevin Warsh in Portugal Wednesday reiterated that he would push inflation back to the Fed’s 2% target, though he wouldn’t comment on whether the Fed would raise rates at its next meeting, later this month.
US employers still reluctant
Average paychecks, meanwhile, rose 3.5% from a year ago, a decent gain but one that still trailed inflation, leaving many Americans struggling to keep up with rising costs for necessities such as food, gas, and housing.
Historically, a job gain of just 57,000 would be seen as weak. Yet as more Americans retire and new immigration has dropped sharply, the U.S. workforce has shrunk in the past year. As a result, even gains at that level are enough to keep the unemployment rate unchanged over time.
Fewer Americans are working or seeking work
Last month, in fact, the workforce declined sharply, with the percentage of Americans working or looking for jobs falling to 61.5%, down from 61.8% in May. It’s the lowest level in five years.
Much of the decline reflected the aging of the population, as more than 10,000 Americans turn 65 every day and many retire. Yet the proportion of Americans aged 25 through 54 who are working or searching for jobs also fell last month.
Both total nonfarm payroll employment (+57,000) and the unemployment rate (4.2 percent)
changed little in June, the U.S. Bureau of Labor Statistics reported today. Employment
continued to trend up in professional and business services, social assistance, and health
care. Leisure and hospitality lost jobs.
This news release presents statistics from two monthly surveys. The household survey measures
labor force status, including unemployment, by demographic characteristics. The establishment
survey measures nonfarm employment, hours, and earnings by industry. For more information
about the concepts and statistical methodology used in these two surveys, see the Technical
Note.
Household Survey Data
Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.1
million, changed little in June. These measures also changed little over the year.
(See table A-1.)
Among the major worker groups, the unemployment rates showed little or no change in June for
adult men (3.9 percent), adult women (3.7 percent), teenagers (14.6 percent), and people who
are White (3.6 percent), Black (6.6 percent), Asian (3.9 percent), or Hispanic (5.2 percent).
(See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9
million in June but is up by 286,000 over the year. The long-term unemployed accounted for
27.3 percent of all unemployed people in June. (See table A-12.)
The labor force participation rate decreased by 0.3 percentage point to 61.5 percent in June,
and the employment-population ratio edged down by 0.2 percentage point to 59.0 percent. Both
measures changed little over the year after accounting for annual population control
adjustments. (See table A-1.)
The number of people employed part time for economic reasons changed little at 4.7 million in
June. These individuals would have preferred full-time employment but were working part time
because their hours had been reduced or they were unable to find full-time jobs.
(See table A-8.)
In June, the number of people not in the labor force who currently want a job changed little
at 6.0 million. These individuals were not counted as unemployed because they were not
actively looking for work during the 4 weeks preceding the survey or were unavailable to take
a job. (See table A-1.)
Among those not in the labor force who wanted a job, the number of people marginally attached
to the labor force changed little at 1.8 million in June. These individuals wanted and were
available for work and had looked for a job sometime in the prior 12 months but had not looked
for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of
the marginally attached who believed that no jobs were available for them, was essentially
unchanged in June at 477,000. (See Summary table A.)
Establishment Survey Data
Total nonfarm payroll employment changed little in June (+57,000), roughly in line with the
average monthly change over the prior 12 months (+36,000). In June, employment continued to
trend up in professional and business services, social assistance, and health care. Employment
in leisure and hospitality declined. (See table B-1.)
Employment in professional and business services continued to trend up in June (+36,000). The
industry has added 172,000 jobs since a recent low in October 2025.
Social assistance added 25,000 jobs in June, primarily in individual and family services
(+17,000). Over the prior 12 months, social assistance had added an average of 16,000 jobs per
month.
In June, employment in health care continued its upward trend (+22,000) but at a slower pace
than the average monthly gain over the prior 12 months (+38,000). In June, hospitals added
9,000 jobs.
Leisure and hospitality employment declined by 61,000 in June, reflecting weaker than usual
seasonal hiring. Thus far in 2026, employment in the industry has shown little net change.
Employment showed little or no change over the month in other major industries, including
mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade;
retail trade; transportation and warehousing; information; financial activities; other
services; and government.
In June, average hourly earnings for all employees on private nonfarm payrolls rose by 13
cents, or 0.3 percent, to $37.64. Over the year, average hourly earnings have increased by 3.5
percent. In June, average hourly earnings of private-sector production and nonsupervisory
employees rose by 7 cents, or 0.2 percent, to $32.38. (See tables B-3 and B-8.)
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours
in June. In manufacturing, the average workweek edged down to 40.3 hours, and overtime edged
up to 3.2 hours. The average workweek for production and nonsupervisory employees on private
nonfarm payrolls declined by 0.1 hour to 33.7 hours. (See tables B-2 and B-7.)
The change in total nonfarm payroll employment for April was revised down by 31,000, from
+179,000 to +148,000, and the change for May was revised down by 43,000, from +172,000 to
+129,000. With these revisions, employment in April and May combined is 74,000 lower than
previously reported. (Monthly revisions result from additional reports received from
businesses and government agencies since the last published estimates and from the
recalculation of seasonal factors.)
The Employment Situation news release for July 2026 is scheduled to be published on Friday,
August 7, 2026, at 8:30 a.m. (ET).
Notes From APS Radio News
Between February of 2020 and September 2022, the US Federal Reserve added about $4.6 trillion to its holdings, in effect infusing into the economy massive quantities of currency.
A number of other central banks followed comparable policies during that period.
The European Central Bank was one such.
As a result of lock-downs, which were imposed reportedly over the covid thing, shortages of various goods and services resulted.
The combination of shortages and massive infusions of money resulted in increased rates of inflation.
The war in Ukraine resulted in sanctions against Russia.
And US and Israeli attacks against Iran led to disruptions of the supply petroleum, increasing energy prices.
