June Jobs Report: A Weirdly Positive Jobs Report With Weakness Underneath

Jul 03, 2025

Puzzled looking man holding smartphone — nortonrsx/iStockphoto

At this point, you can probably sing along: this month’s jobs report looks good on the surface, but the underlying numbers tell a different story.

The economy added 147,000 jobs last month, per the Bureau of Labor Statistics, beating analysts’ expectations of 110,000 jobs added to public and private payrolls. The unemployment rate ticked down to 4.1%. And revisions to previous reports showed 16,000 additional jobs for April and May.

However, state and local government jobs made up a disproportionate number of new positions — 70,000 in total — while sectors like business and professional services, leisure and hospitality, transportation and warehousing, and construction remained flat for the month. These industries typically show growth in a healthy economy, but have been uneven or stagnant in recent months, suggesting weakness overall. In fact, only healthcare and social assistance have been a reliable source of employment growth in recent reports.

Further, the number of job seekers who counted as marginally attached to the labor force increased by 234,000 to 1.8 million. The tally of discouraged workers now stands at 637,000, an increase of 256,000.

What Experts Are Saying

“The robust preliminary headline number for June should be taken with a grain of salt. Government job gains accounted for about half of all of the jobs added last month. This is far from typical. In the month prior, they accounted for less than 5%, for context. Most of those new jobs were in state education, possibly teaching positions being added in advance of the coming school year. If this figure was more typical, we’d see much softer overall growth in this preliminary data — the number of private jobs added in June marks a 46% decrease from those added in the previous month. While this isn't as dramatic as what the ADP data is showing this morning, and it will be revised, it can't be overlooked as a potential sign of weakness.” - Elizabeth Renter, Senior Economist at NerdWallet

“Wage growth is also losing momentum. Average hourly earnings rose just 0.2% month-over-month (the smallest increase in six months) and just 3.7% year-over-year. Weekly hours declined slightly to 34.2. And although the jobless rate fell, it did so for the wrong reasons: the labor force shrank, participation dropped to 62.3%, and the number of discouraged workers surged by over 250,000. Many people simply left the labor force altogether.” - Thomas J. Thompson, Chief Economist at Havas

“It’s interesting to see state and local government still surging ahead, adding a collective 80,000 jobs last month. It’s possible that some of the 69,000 people who’ve left the federal government since January have found work with cities and states.” - Lydia DePillis, The New York Times

“I often get questions about whether we should still trust government economic data, given President Trump’s past criticism of official statistics and willingness to break longstanding norms. My answer is yes — but that there are real concerns about the long-term reliability of government statistics in an era of shrinking budgets and falling survey response rates.” - Ben Casselman, The New York Times

Just Give Me the Data, Please

The Employment Situation Summary by the numbers:

Total nonfarm employment: 147,000 jobs added

Unemployment rate: 4.1% (slightly lower)

Long-term unemployed: 1.6 million (+190,000 job seekers)

Labor force participation rate: 62.3% (little changed)

Employment-population ratio: 59.7% (flat)

People employed part-time for economic reasons: 4.5 million (little changed)

People who want jobs and have looked for work in the last year: 1.8 million (+234,000)

Discouraged workers: 637,000 (+256,000)

Average hourly earnings: $36.30 (+8 cents)

Industries that added jobs:

State government (+47,000 jobs — 40,000 in education)
Local government (+23,000 jobs)
Healthcare (+39,000 jobs)
Social assistance (+19,000 jobs)

Industry that lost jobs:

Federal government (-7,000 jobs)

Industries that remained flat:

Mining, quarrying, and oil and gas extraction
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Financial activities
Professional and business services
Leisure and hospitality

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