Employers unexpectedly cut 23,000 jobs last month, and Labor Department revisions shaved 103,000 jobs off payrolls in May and June. The unemployment rate dipped to 4.1% only because Americans left the job market.<\/p>\n
The June jobs numbers from the Labor Department Friday marked a sharp reversal for the American labor market and a political setback for President Donald Trump less than three months before his Republican party seeks to keep full control of Congress in the midterm election. <\/p>\n
Forecasters had expected job creation to approach 100,000 last month.<\/p>\n
Local public schools cut 50,000 jobs in July, restaurants and bars 26,000, retailers 19,000. <\/p>\n
The 4.1% unemployment rate was the lowest since June 2025 \u2013 but it dropped for the wrong reasons: Fewer people were competing for work as 264,000 dropped out of the labor market. The share of those working or looking for work fell to 61.4%, the lowest since February 2021.<\/p>\n
The Trump administration, which has imposed massive tariffs in an attempt to create manufacturing jobs, noted that jobs were up 22,000 at construction companies and 5,000 at factories. \u201cThe Trump industrial resurgence is on schedule. Manufacturing and factory construction jobs grew again in July even as government payrolls continued to significantly shrink,\u2019\u2019 said White House spokesman Kush Desai.<\/p>\n
Hiring had rebounded this year from a lackluster 2025 in the face of the conflict in the Persian Gulf that has sent energy prices surging and put a strain on family budgets. Job growth had been solid, if unspectacular. Some businesses are having trouble filling vacancies. Others are using technology to do the work humans used to do. <\/p>\n
Americans who have jobs are enjoying unusual job security. Layoffs are low by historical standards. Companies, scarred by the surprise labor shortages that followed COVID-19 lockdowns a few years ago, don\u2019t want to risk giving up the staff they have.<\/p>\n
One week in July, the number of Americans filing for unemployment benefits dropped to the lowest level in more than 50 years. The jobless rate tumbled to 4.2% in June, the lowest in a year, and is expected to have stayed there last month, according to a survey of forecasters by the data firm FactSet.<\/p>\n
But Americans who have lost their jobs \u2013 or are seeking to bust into the job market for the first time \u2013 are struggling to catch a break. <\/p>\n
Economists have used the term \u201cno hire, no fire\u2019\u2019 to describe the unusual job market conditions.<\/p>\n
So far this year, employers are adding 61,000 jobs a month, up from 9,700 in 2025, the weakest outside a recession since 2002. <\/p>\n
The United States doesn\u2019t need as many jobs as it used to to keep the unemployment rate from rising. Trump\u2019s immigration crackdown and the ongoing retirement of baby boomers mean fewer people are competing for work. So the \u201cbreak-even\u2019\u2019 rate of monthly hiring, 155,000 in 2023-2024, has dropped, perhaps to nearly zero, according to a Federal Reserve study.<\/a><\/p>\n \u201cThere are just fewer people available to hire,\u2019\u2019 said Sal Guatieri, senior economist at BMO Capital Markets. For some, labor shortages translate into higher wages. The payroll processor ADP reported Wednesday that people who changed jobs last month pocketed a 7% raise, the biggest year-over-year gain in almost a year and a premium over a 4.4% increase for workers who stayed where they were.<\/p>\n At the same time, companies have become more productive in recent years, using technology to do the work that humans used to do. \u201cWe are seeing companies produce more with their current staff,\u2019\u2019 Guatieri said. \u201cSo there\u2019s less need to take on new workers.\u2019\u2019<\/p>\n Shortages of available workers and rising productivity, he said, \u201cwill keep the lid on the rate of hiring and monthly job growth.\u2019\u2019<\/p>\n Moreover, the outlook for hiring is clouded by the ongoing fighting in the Persian Gulf, which has pushed up energy prices and squeezed family budgets, and by the rise of artificial intelligence, which could either make workers more efficient and better-paid — or take their jobs.<\/p>\n