- The US economy added 147,000 jobs in June, surpassing economists’ forecast of 110,000.
- Unemployment dipped to 4.1%, aided partly by fewer Americans participating in the labor force.
- Private-sector hiring slowed significantly to 74,000 jobs, its weakest showing since October 2024.
- The labor force participation rate declined to 62.3%, the lowest since late 2022, with foreign-born participation notably down year-over-year.
Jobs Beat Expectations, But Not All Sectors Share in Growth
The US labor market added a stronger-than-expected 147,000 jobs in June, according to the Labor Department. The gain exceeded economists’ expectations of 110,000 and came alongside downward pressure on the unemployment rate, which ticked down to 4.1% from 4.2%.
Revisions also showed April and May job growth was stronger than previously reported, adding a combined 16,000 more jobs than earlier estimates.

Private Sector Loses Momentum
While the headline figure looked solid, underlying data showed weakening in the private sector. Employers outside government added just 74,000 jobs—down from 137,000 in May and the lowest level since October 2024.
Manufacturing jobs fell for the second month in a row. Professional and business services were flat, and hiring in leisure and hospitality remained soft.
Education Gains May Be Seasonal
Most of the job growth in government came from state and local education, a rise that some economists believe was distorted by seasonal adjustment factors used by the Labor Department at the end of the school year.
Immigration Crackdown Pressures Labor Force
The labor-force participation rate fell to 62.3% from 62.4%, its lowest level since 2022. The drop was partly driven by declines among foreign-born workers. According to Morgan Stanley, immigration enforcement may be discouraging some from seeking employment.
Labor force participation among foreign-born individuals fell to 66.3% in June from 67.3% a year earlier. Native-born participation also slipped slightly.

Uncertainty Keeps Hiring on Pause
With trade and immigration policy still in flux, many companies are delaying major hiring or layoffs. Analysts note that the job market may require fewer new jobs to maintain current unemployment levels due to reduced workforce growth.
A report from the Brookings Institution and American Enterprise Institute projects net immigration could fall to zero or turn negative this year—implying that as few as 10,000–40,000 monthly job additions could stabilize the jobless rate.
Fed Likely to Hold Course
Thursday’s report is not expected to change the Federal Reserve’s cautious approach on rate cuts. While inflation remains above the Fed’s target, it has moderated somewhat, and the slowing labor market gives the central bank more reason to wait.
Bottom Line
June’s job gains reflect a still-resilient economy, but weaknesses in private hiring, manufacturing, and labor force participation suggest the labor market may be cooling under the surface. Uncertainty over tariffs, immigration, and fiscal policy continues to weigh on employer decision-making heading into the second half of 2025.