U.S. Economy Adds Less Than Half The Jobs Analysts Expected In June, But Unemployment Rate Drops

Nonfarm payrolls for June increased by much less than expected in June, according to new data from the Bureau of Labor Statistics.

Concretely, nonfarm payrolls increased by 57,000, less than half the 115,000 expected by the Dow Jones consensus forecast.

However, the unemployment rate dropped to 4.2%, slightly ahead of the 4.1% than the same period a year ago.

CNBC explained that the drop was explained by a lower labor force participation rate, which was 0.3 percentage points lower and clocked in at 61.5%, the lowest since March 2021.

Leisure and hospitality reported 61,000 fewer jobs, with the BLS said was a result of of lower seasonal hiring even despite the World Cup taking place in the country.

In contrast, professional and business services gained the most jobs for the month, climbing by 36,000. Social assistance increased by 25,000 and health care by 22,000.

ADP data from Wednesday also showed that private sector employment grew by 98,000 posts after a seasonal adjustment. The Dow Jones consensus stood at 110,000.

Almost half of the growth was in the education and health services sector, data showed. Only 2,000 jobs were not in the services industry.

Nela Richardson, ADP’s chief economist, said “the pace of hiring is telling a story of both supply and demand. We know it’s taking people longer to find work, but there also are signs of labor supply constraints in certain industries.” “For now, the overall effect is a slowdown in job creation.”

Most of the hiring was done by small businesses, as those with fewer than 50 employees added 53,000 roles. Companies employing 500 people or more added 25,000 jobs and those in between hired 29,000.

At the same time, recent data released by Challenger, Gray & Christmas showed that US layoffs surged to their highest May level since the pandemic in 2020, with employers announcing more than 97,000 job cuts across the country last month and citing artificial intelligence as a key factor in roughly 40% of those decisions.

Chris Hutchins, founder and chief executive of Hutchins Data Strategy Consultants, warned that the attribution may not always reflect reality. He told Moneywise that roles involving repetitive, pattern-based tasks are naturally more exposed to automation, but added that when AI is cited beyond those areas, ‘the underlying cause is likely something other than AI.’

However, a growing majority of workers around the world are worried about their job security because of the rise of artificial intelligence despite historically low unemployment rates and steady economic growth, according to a recent survey.

ADP’s latest Today at Work 2026 report found that only 22% of workers globally strongly agree with the claim that their job is safe from elimination, meaning more than three-quarters of the global workforce harbor concerns about their long-term employment prospects.