June Jobs Beat Expectations, But Cracks Emerge Beneath the Surface

Despite swirling uncertainty over President Trump’s sweeping tariff plans, the U.S. job market surprised forecasters in June, adding a better-than-expected 147,000 jobs and nudging the unemployment rate down to 4.1%. That’s above the anticipated 117,500 gain and keeps the three-month average at a decent 150,000 new jobs a month.

But a closer look at the numbers reveals some warning signs. Much of June’s boost came from health care (+58,600 jobs) and state and local government hiring (+80,000). Strip out the public sector, and private employers added just 74,000 jobs — the weakest pace since October 2024. Manufacturing and construction, usually job engines, remained cautious, weighed down by fears over tariffs and tightening monetary policy.

One red flag: Black unemployment spiked nearly a full point to 6.8%, the highest since early 2022, while the labor force participation rate edged down. Wage growth also lost steam, with hourly earnings up just 0.2% last month.

Even so, layoffs remain low. Weekly jobless claims fell slightly to 233,000, suggesting companies are holding tight to their workers even if they’re not expanding much. Continuing claims, though, hovered near three-and-a-half-year highs — signaling job seekers are staying unemployed longer, with nearly a quarter out of work for six months or more.

Markets responded positively despite the mixed signals. The Dow climbed 365 points as investors balanced solid headline growth against signs of an economy cautiously feeling its way through policy shifts and trade tensions.

June’s job report shows an economy still on its feet, but watching for cracks beneath.



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