US jobs data: Hiring falls to just 57,000 in June, unemployment rate at 4.2% — Here's what we know

US jobs data: Hiring in the United States fell to just 57,000 in June as employers pulled back due to high inflation and global uncertainties, according to an AP report today. It added that numbers indicate firms are cautious of the economy, noting that inflation is at a three-year high and consumer confidence near post-pandemic lows.

The growth is “less than expected”, as per an AFP report, which added that jobs data from the US government showed the unemployment rate ticked down to 4.2%.

“Both total nonfarm payroll employment (57,000) and the unemployment rate (4.2%) changed little in June,” AFP said, citing the US Bureau of Labor Statistics' statement on 2 July.

US hiring slumps: Down to less than half from May

The AP report added that the 57,000 jobs added in June 2026 is less than half the previous month’s (May) total and indicates that companies remain cautious of the economic outlook.

• Unemployment rate declined to a low 4.2% from 4.3% in May, as per the department, which further noted that this decline mostly occurred because many people out of work gave up looking and were no longer counted as unemployed.
• Job gains initially reported in April and May were also revised lower, it added.
• US economy growing modestly despite ongoing challenges. It expanded at a 2.1% annual pace in the first three months of the year, though some forecasts expect it will slow in the April-June quarter.
• According to a Bloomberg report, participation rate (how much of the population is employed or job seeking) fell to 61.5% — the lowest in over five years.
• It added that participation from “prime-age workers” (between 25-54) dropped to 83.3%, matching the lowest level since 2023.

• Among sector, the BB report noted that manufacturing and construction payrolls rose in June — largely credited to the data centre buildout as a demand driver.
• On the other hand, big tech saw huge layoffs, with banner names such as Meta and Microsoft slashing headcount to offset costs for artificial intelligence (AI). Information payrolls continued to decline, marking the 17th drop in the last 18 months, it added.
• Further, financial activities sector jobs saw little change.
• Average hourly earnings rose 3.5% from a year earlier.
• It added that another report showed that applications for unemployment benefits were little changed last week.
• The AP report noted that historically, average job gains of 1,88,000 a month are not seen as “strong” growth. However, with more Americans retiring and immigration sharply down, the US workforce is barely growing.
• The report further noted that AI adoption has led to widespread worries that it will replace many workers and reduce employment.

US June jobs data below expectations

Notably, according to a Bloomberg report, the publication's economists expected the June payrolls to have risen at a robust pace, exceeding the gain seen in May. They expected especially strong hiring in leisure and hospitality — largely due to activity from the FIFA Football World Cup; and fast increase from government employment, Anna Wong, chief US economist at Bloomberg Economics said.

CIC economists Gabriel Corbassiere and Marie Birg told the publication the release of US jobs data would be a “key event” for traders watching for signs that the economy is growing quickly enough to support the case for interest-rate hikes from the Federal Reserve.

On 1 July, Fed Chairman Kevin Warsh said inflation risks had reduced over the past weeks adding that he would pare down the central bank’s 2% target. He also reiterated that the Fed would deliver price stability, which drove investors to price in potential rate hikes as soon as this month.

(With inputs from Agencies)