US job growth slows to 57K in June
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- U.S. nonfarm payrolls increased by 57,000 jobs in June, significantly below the 110,000 forecast by economists and down from a revised 129,000 gain in May
- The labor force participation rate fell to its lowest level in over five years, contributing to a stable unemployment rate despite weaker hiring
- The Federal Reserve faces renewed uncertainty after the weak jobs data, with markets pricing in a 50.7% chance of a September rate hike prior to the report
- Economists note that the U.S.-Iran ceasefire and lower oil prices have reduced downside risks to the labor market, supporting a firmer job growth outlook for the rest of the year
- Small business hiring plans and consumer sentiment surveys suggest a more subdued labor market than payroll data alone indicate, with job availability perceptions near a 5½-year low
Why it matters: The 57,000-job gain is half the expected pace, weakening the case for a September rate hike and giving the Fed room to hold steady. Lower participation masks labor market softness, benefiting borrowers but raising concerns about long-term workforce engagement.
