June jobs slow down, fewer Americans working overall, and wage growth still lame

Starting in February, not only had we seen prices go up at the gas pump, but US job growth had also gone up, as the Bureau of Labor Statistics had previously reported increases of 214,000 jobs in March, 179,000 in April, and 172,000 in May. So before the 4th of July weekend, many looked at Thursday's jobs report to see if that winning streak would continue in June.

Not so much.

The U.S. economy added just 57,000 jobs in June, a worrying sign for labor market stability as wage growth tracked below inflation for a third consecutive month.

In June, average hourly earnings increased by 3.5%, which remains far below the most recent inflation reading of 4.2%....

The report also included sharp revisions lower for prior months. Hiring in April was cut by 31,000 and May was revised down by 43,000.

So we ended up having 17,000 fewer jobs than what was reported a month ago. And it brings the 3 month gains down from the 2-year highs they were at in May.

Some of this seems to be a seasonal reversion where May had sizable increases in some sectors that hired up for the Summer in that month to get ahead of an early Memorial Day weekend, and then June didn't have as much hiring, leading to seasonally-adjusted "losses".

Seasonally adj job change, US May and June 2026
Leisure and Hospitality
May +40,000
June -61,000

Retail Trade
May +8,200
June -7,500

The 2-month average for job growth between May and June is 93,000 jobs overall and 73,000 in the private sector, and that seems to be a good number to look at for July's report to see if we have true slowing in the job market, or if we are still growing at a decent rate.

For the household survey, the US unemployment dropped form 4.3% to 4.2%, but it wasn't for a good reason, as both the labor force (-720,000) and the number of employed Americans (-503,000) went down by significant amounts in the June report. Some of that may also be seasonal reversion, but the overall trend has been clearly negative for more than a year.

This means the country's Employment-Population Ratio (of the number of Americans actually working) is down to 59.0%, which is the lowest non-pandemic level in 12 years.

Not a great sign for overall growth, and wage growth also continues to stagnate, with average hourly wages only up 0.3% overall and an even-worse 0.2% for non-supervisory workers. While inflation may go down in June due to the lower gas prices, having annual wage growth over in the mid-3% range likely means another 12-month period of falling real wages between June 2025 and June 2026.

The June jobs report doesn't show a recession, but it is a noteworthy slowdown from the strong growth in the 3 months before it. And the lack of wage growth may look good for companoies' profit-loss statements, but it's lousy for everyday people who do actual work.