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FinanceUS adds only 57K jobs in June, far below 115K forecast; jobless rate falls to 4.2%
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The US economy added only 57,000 jobs in June 2026, less than half the 115,000 forecast by economists, according to the Bureau of Labor Statistics. The unemployment rate ticked down to 4.2% from 4.3%, but for the wrong reason: the labor force participation rate dropped 0.3 percentage points to 61.5%, meaning fewer people were searching for work. The employment-population ratio also fell to 59.0%. Revisions cut 74,000 previously reported jobs from April and May. Leisure and hospitality was the biggest loser, shedding 61,000 jobs due to weaker seasonal hiring. Professional services, social assistance, and healthcare added jobs. Markets surprisingly rose on the news, as a cooling labor market reduces pressure on the Federal Reserve to raise rates. New Fed Chair Kevin Warsh, who succeeded Jerome Powell in May, has leaned hawkish amid inflation at a three-year high, with the FOMC voting unanimously to hold rates at 3.50%-3.75%.
Source report
By Aditi Ganguly Published: July 11, 2026, 10:15 AM UTC | Updated: July 11, 2026, 3:15 AM PDT 11 min read
Overview
The U.S. economy added only 57,000 jobs in June, according to the Bureau of Labor Statistics (BLS) — less than half the 115,000 that economists polled by Dow Jones had forecast. The unemployment rate edged down slightly to 4.2% from 4.3%, though not for encouraging reasons.
The report was released a day early due to the Independence Day holiday.
Market Reaction
Despite the disappointing data, markets responded positively:
- Dow Jones Industrial Average: Rose approximately 246 points (+0.5%)
- S&P 500: Added 0.4%
- Chip stocks, which had been under pressure, rebounded
Why stocks cheered a weak report: A cooling labor market reduces pressure on the Federal Reserve to raise interest rates. Cheaper borrowing costs tend to support stock prices.
Key Details
Anemic but Not Unprecedented
While payroll growth of 57,000 is weak by recent standards, it remains roughly in line with the average monthly gain of 36,000 over the past 12 months.
The Real Story: Revisions and Participation
The headline number masks deeper concerns:
- Labor force participation rate: Fell 0.3 percentage points to 61.5% — meaning fewer Americans are working or actively seeking work
- Employment-population ratio: Declined to 59.0%
- When people stop looking for work, they are no longer counted as unemployed, which mechanically lowers the unemployment rate
Revisions Tell a Bleaker Tale
The BLS revised prior months downward:
| Month | Previously Reported | Revised | |-------|-------------------|---------| | April | 179,000 | 148,000 | | May | 172,000 | 129,000 |
Total jobs erased: 74,000
Downward revisions of this magnitude are a classic late-cycle indicator: initial estimates paint a rosier picture, with the true, weaker numbers arriving one to two months later. This pattern persisted through much of 2024.
Sector Performance
Winners
| Sector | Jobs Added | Notes | |--------|-----------|-------| | Professional and business services | +36,000 | 172,000 added since October 2025 low | | Social assistance | +25,000 | — | | Health care | +22,000 | Below its 38,000 monthly average over the past year |
Loser
- Leisure and hospitality: Lost 61,000 jobs
- BLS attributed the decline to "weaker than usual seasonal hiring" — a significant miss for an industry that typically ramps up staffing ahead of summer
Implications for the Fed and Consumers
The June jobs report lands on the desk of new Federal Reserve Chair Kevin Warsh, who took office in May, succeeding Jerome Powell.
Context: Former President Trump repeatedly criticized Powell for not cutting rates quickly enough.
Warsh's stance: Initially expected to be dovish, Warsh has instead leaned hawkish, with inflation at a three-year high. At his first Federal Open Market Committee (FOMC) meeting in June, the committee voted unanimously to hold the federal funds rate at 3.50% to 3.75%.
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Source
Yahoo FinanceWestern
Part of this Story
U.S. June Jobs Report Misses Expectations, Unemployment Falls to 4.2%