U.S. economy added 57,000 jobs in June, less than expected; unemployment rate at 4.2%

The U.S. economy saw job creation cool sharply heading into the summer, the Bureau of Labor Statistics reported Thursday.

Nonfarm payrolls for June increased by a seasonally adjusted 57,000 for the month, slower than the downwardly revised 129,000 added in May and worse than the 115,000 Dow Jones consensus forecast.

The unemployment rate, however, dropped to 4.2%, and slightly ahead of the 4.1% where it was a year ago.

The move lower was largely due to a slump in the labor force participation rate, which dropped 0.3 percentage point to 61.5%, the lowest since March 2021. Household employment plummeted during the month, with 507,000 fewer people reported at work.

Average hourly earnings rose 0.3% for the month and 3.5% from a year ago, both in line with the consensus forecasts.

Professional and business services contributed the most, with a gain of 36,000. Social assistance added 25,000 and health care employment rose by 22,000, a slower-than-normal pace for the industry. Government jobs rose by 8,000.

However, leisure and hospitality reported a loss of 61,000 jobs, which the BLS said reflected slower than usual seasonal hiring. There had been speculation that the World Cup might provide some boost to the payroll numbers, with Goldman Sachs estimating a gain of 40,000.