June US Nonfarm Payrolls Increase Only 57k, Missing Expectations as Participation Slides

June’s US job growth slowed considerably more than anticipated, with Non‑Farm Payrolls adding just 57,000, far short of the 114,000 forecast. The prior month’s figure was also sharply revised down to 129,000 from the originally reported 172,000, underscoring a clear deceleration in labor‑market momentum as we move into the second half of the year.

Although the headline was weak, the unemployment rate unexpectedly slipped to 4.2% from 4.3%. This modest improvement stemmed primarily from a 0.3‑percentage‑point decline in labor‑force participation, which fell to 61.5%, indicating that fewer individuals were actively seeking employment rather than a surge in hiring. At the same time, average hourly earnings rose 0.3% month‑over‑month for the second straight month, pushing annual wage growth to 3.5% and signalling that wage pressures remain robust despite the cooler hiring environment.

The report paints a mixed picture for the Federal Reserve. While hiring clearly lost momentum, persistent wage growth and a slightly lower unemployment rate do not yet signal a rapidly deteriorating labor market. Consequently, markets are likely to interpret the data as diminishing the urgency for another rate hike, though the possibility remains open. Focus will now shift to forthcoming labor‑market and inflation releases to determine whether the observed slowdown reflects a broader moderation in economic activity rather than a transient blip.

Indicator
Previous
Latest
Consensus

Non-Farm Payrolls
129k
57k
114k

Average Monthly Job Growth
(Past 12 Months)
—
36k
—

Unemployment Rate
4.3%
4.2%
4.3%

Labor Force Participation Rate
61.8%
61.5%
—

Average Hourly Earnings (MoM)
0.3%
0.3%
0.3%

Average Hourly Earnings (YoY)
3.4%
3.5%
3.5%

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