Hold onto your wallets—June’s jobs report just dropped a bombshell, showing the US economy powering through with a surprising 147,000 new jobs.
According to CNN, the Bureau of Labor Statistics revealed a robust addition of 147,000 jobs, beating forecasts of 117,500, while the unemployment rate dipped to 4.1% from 4.2%, though cracks like uneven industry gains and slowing wage growth hint at underlying concerns.
Let’s rewind a bit. Revisions to earlier months paint a steady picture: May’s job growth ticked up by 5,000 to 144,000, and April saw an 11,000-job boost to 158,000. The three-month average now sits at a solid 150,000 jobs.
June’s job growth wasn’t evenly spread. Health care led with 58,600 new roles, leisure and hospitality added 20,000, and state and local government surged by 80,000—though economists at Pantheon Economics warn this spike might be “artificial.” Private sector hiring, however, tells a softer story. Businesses added just 74,000 jobs, the smallest gain since October 2024, after factoring in a loss of 7,000 federal positions.
Wage growth also slowed, with average hourly earnings creeping up by just 8 cents to $36.30. The annual rate dropped to 3.7% from 3.9%, signaling less fuel for consumer spending.
Not everyone’s celebrating this jobs report. The unemployment rate for Black workers jumped 0.8 percentage points to 6.8%, the highest since January 2022. As Daniel Zhao of Glassdoor noted, “There has been this thought that when the economy slows, Black workers might feel the effects more quickly.”
Zhao added, “It is very dependent on which industries are impacted.” This disparity underscores how uneven economic pressures can hit specific communities harder.
Meanwhile, job seekers face longer struggles. Many remain unemployed for about six months, with 23.3% out of work for 27 weeks or longer, nearing a three-year high.
Wall Street liked the numbers—stocks climbed Thursday morning. The Dow rose 365 points (0.8%), while the S&P 500 and Nasdaq each gained 0.9% by mid-morning. But is this rally masking deeper issues?
Hiring activity is at near 10-year lows, with workers less confident to jump ship, though employers aren’t rushing to cut staff. Layoff trends remain stable, with first-time unemployment filings dropping to 233,000 for the week ended June 28, down from 237,000.
Continuing claims held steady at 1.964 million for the week ended June 21. Still, labor force participation declined, hinting at a shrinking pool of active workers.
Policies cloud loom large. The Federal Reserve hesitates to lower interest rates, wary that tariff policies could stoke inflation and squeeze businesses, as Samuel Tombs of Pantheon Macroeconomics warned: “Tariff tax hikes are weighing heavily on labor demand.”
Breakeven job growth—jobs needed to match population and labor force trends—is estimated near 100,000 monthly by Deutsche Bank economists, down from higher levels tied to past immigration surges. If restrictive policies shrink the foreign-born workforce, that breakeven could fall to just 50,000, tightening the labor market further.
For investors and savers, this report is a mixed bag—decent job growth but with warning signs of slowing momentum. Keep an eye on Fed moves and tariff impacts; they could sway inflation and your portfolio. Consider defensive stocks or cash reserves if uncertainty grows, because as Zhao cautioned, “If the unemployment rate stays low and inflation stays high, the Fed might keep rates higher for longer.”