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Employers added 147,000 jobs in June reflecting continued resilience in labor market The unemployment rate was 4.1 percent.

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Employers created 147,000 jobs in June, close to the pace of job creation in May, despite economic uncertainty that has strained the labor market.

The unemployment rate ticked down to 4.1 percent, according to a jobs report released Thursday by the Labor Department.

Businesses have been adding jobs at a slower pace this year compared to last year. And economists say that the job market is in an increasingly delicate position as higher tariffs, federal spending cuts and the immigration crackdown weigh on employers.

So far, Trump administration policies that have spooked Wall Street and Main Street alike have yet to take a hit to the labor market. Layoffs remain low. Job openings increased in May, according to a separate data report by the Labor Department. But economists predict a pronounced slowdown as the year unfolds.

There are other signs of growing labor market frailty. The pace of hiring through May has been hovering near longtime lows, according to the Labor Department. And the number of people receiving unemployment benefits grew to the highest level since November 2021 in June, according to Labor Department data. Slower hiring can have just as much of an impact on the job market as layoffs, economists say, with new and returning job seekers unemployed for longer spells.

Federal Reserve Chair Jerome H. Powell, under escalating attacks from President Donald Trump to lower interest rates, has said that the Fed is prepared to lower borrowing costs if the labor market sours.

But slower job gains could be the result of Trump’s restrictive immigration policies, which include sealing off the U.S.-Mexico border, more worksite raids, and the revocation of legal status for hundreds of thousands of immigrants. Economists at the Brookings Institution and American Enterprise Institute released a report this week that said that net migration to the United States this year could be zero or negative, meaning more people could leave the country than enter.

A lack of immigration can force employers to boost wage growth, lead to labor shortages in key industries, and make it harder for Fed policymakers to understand the health of the labor market.

“There’s more risk of a policy mistake where interest rate cuts come too late,” said Daniel Zhao, lead economist at Glassdoor. As immigrants exit, the labor market may remain on solid footing with smaller job gains, but the size of the workforce is difficult to gauge in real time.

There are other indications that the labor market has been on fragile ground. In May, about 80 percent of all job creation came from just two sectors: health care and leisure as well as and hospitality.

Economists warn that hiring in leisure and hospitality could soon slow amid reduced international travel to the U.S. and depressed consumer spending.

For now, health care remains a pillar of U.S. job growth given the aging demographics of the population. But President Donald Trump’s massive tax and immigration bill that passed the Senate this week contains dramatic Medicaid cuts could trigger the shutdown of hospitals and major cuts to health care jobs.

Meanwhile, the federal government has shed some 59,000 jobs since January amid mass layoffs at major agencies including the Department of Health and Human Services, the Internal Revenue Service, and the U.S. Agency for International Development. And job creation in white-collar sectors has been at a standstill for many months, reflected in the rising unemployment rate for recent college graduates.

Tariff-sensitive industries such as transportation and warehousing, manufacturing, and retail have been creating few or no jobs, and are expected to take a sharper hit from heightened trade barriers in the coming months.

Willi’s Ski and Board, a retailer with three locations in western Pennsylvania, plans to reduce hiring by at least 10 percent when the winter sports season begins this year. “The tariffs are a big problem for a small business,” said Kjerstin Klein, a co-owner, who typically employs 150 workers each winter season. “We run on a shoestring budget, and uncertainty is a killer.”

The retailer purchases skis and snowboarding equipment from suppliers that import from Europe and Asia. Those suppliers have warned of price increases of 10 to 15 percent with Trump’s tariffs, which Klein says she has no choice but to pass on to customers. “If prices increase, demand decreases,” Klein said. “Our income will be less. Our traffic will be less. This is a self-inflicted pandemic basically.”



Key stats:

NONFARM REPORT: JOB LOSSES CONTINUED IN FEDERAL GOVERNMENT (-7,000), WHERE EMPLOYMENT IS DOWN BY 69,000 SINCE REACHING A RECENT PEAK IN JANUARY

AMONG THOSE NOT IN THE LABOR FORCE WHO WANTED A JOB, THE NUMBER OF PEOPLE MARGINALLY ATTACHED TO THE LABOR FORCE INCREASED BY 234,000 IN JUNE TO 1.8 MILLION

OVER THE PAST 12 MONTHS, AVERAGE HOURLY EARNINGS HAVE INCREASED BY 3.7 PERCENT

EMPLOYMENT IN STATE GOVERNMENT INCREASED BY 47,000, LARGELY IN EDUCATION (+40,000)

AVERAGE HOURLY EARNINGS FOR ALL EMPLOYEES ON PRIVATE NONFARM PAYROLLS ROSE BY 8 CENTS, OR 0.2 PERCENT, TO $36.30 IN JUNE
AVERAGE WORKWEEK FOR ALL EMPLOYEES ON PRIVATE NONFARM PAYROLLS EDGED DOWN BY 0.1 HOUR TO 34.2 HOURS IN JUNE
WITH THESE REVISIONS, EMPLOYMENT IN APRIL AND MAY COMBINED IS 16,000 HIGHER THAN PREVIOUSLY REPORTED
THE CHANGE IN TOTAL NONFARM PAYROLL EMPLOYMENT FOR APRIL WAS REVISED UP BY 11,000, FROM +147,000 TO +158,000, AND THE CHANGE FOR MAY WAS REVISED UP BY 5,000, FROM +139,000 TO +144,000

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