The American labor market just hit the brakes. Hard. The Bureau of Labor Statistics reported on July 2 that nonfarm payrolls grew by a mere 57,000 jobs in June, roughly half of what economists had penciled in.
Wall Street had been expecting something in the range of 110,000 to 115,000 new jobs.
The numbers tell a bigger story
May’s jobs number was revised sharply downward, from an initially reported 172,000 to just 129,000. That’s a 43,000-job haircut applied retroactively, which means the labor market was already weaker than anyone realized heading into summer.
The unemployment rate did come in at 4.2%, slightly better than the 4.3% that economists had forecast. Labor force participation dropped to 61.5%, meaning the unemployment rate improved partly because fewer people were actively looking for work. When people stop searching, they stop being counted as unemployed.
