June jobs report: Solid growth to start the summer
Daniel Zhao
Chief Economist at Glassdoor | Jul 3, 2025
The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor’s Lead Economist Daniel Zhao.
Another month, another moderate job gain in the jobs report. The June jobs report shows that the job market continues to shrug off headwinds from tariffs, immigration and federal workforce cuts. The jobs report exceeded expectations slightly, continuing a long-running streak of the job market eschewing expectations over the last few years.
Key stats
- Payroll employment grew 147,000 in June, mostly unchanged from 144,000 in May. State and local government hiring contributed 81,000 job gains, with the private industry contributing 74,000 job gains.
- The unemployment rate ticked down to 4.1% from 4.2% in the month prior
- Average hourly earnings grew 3.7% year-over-year, slowing from the previous month.
Government jobs growth drives June beat
Ironically, even as the Trump administration cuts the federal workforce (which shrank by another 7,000 jobs in June), state & local government jobs growth drove the higher job gains in June. State & local government education jobs growth spiked to 64,000, up from 12,000 job gains in May. Conversely, that means that private payrolls grew by only 74,000, less than expected.
Little sign of tariff impacts
Manufacturing lost 7,000 jobs in June, mirroring the same drop in May. Higher prices from tariffs impact manufacturers immediately, while it takes longer for American firms to relocate supply chains to the U.S.
Construction employment grew 15,000, an uptick from the pace in recent months, even as construction spending has declined every consecutive month since August 2024. As the prices of inputs rise due tariffs, the construction industry faces challenges maintaining further jobs growth.
Transportation & warehousing added 7,500 jobs, with many of these gains coming from couriers & messengers (+4,800) and warehousing & storage (+2,400). Despite concern about tariff front-running behavior waning, the industry has returned to jobs growth in the last two months.
Immigration
A trademark policy of the Trump administration has been its immigration crackdown, but it’s still too early to find impacts of that in the jobs report. The best statistic for this may be the foreign-born unemployment rate, which rebounded to 4.1% in June.
However, just like we saw in the last few years with surging immigration under the Biden administration, the Current Population Survey is not well suited to capture the effects of mid-year shifts in immigration trends.
Population levels are benchmarked annually against the Census Bureau’s estimates and are not updated mid-year. We likely won’t have a better sense of the impact of immigration policy on the immigrant labor force until the beginning of 2026 when the next population control update happens. This also means that, in general, the levels of foreign-born employment, labor force and population in the jobs report should be not used instead of their respective rates.
Ultimately, lower immigration means slower labor force growth, which reduces the breakeven level of jobs growth (the level at which jobs need to be added in order to absorb labor force growth). That means a slower rate of growth is both more likely but also needed to prevent jobs growth from becoming inflationary. However, in a context where policymakers are already looking for signs of a jobs growth slowdown due to weaker employer demand, the slower labor force growth raises the risk of a policy mistake.
More charts
Payroll employment grew by 147,000, a little better than expected and consistent with jobs growth in the last 3 years.
Government drove the jobs growth beat in June, mostly state & local education which added 64,000 jobs. Private payrolls only grew 74,000 in June.
The first half of the year is in the books. The largest slowdowns in jobs growth in the first half of 2025 were in leisure & hospitality (which went from adding 33,000 jobs monthly in H2 2024 to just 11,000 in H1 2025) and non-education government (which went from 18,000 to 2,000). Manufacturing had the largest improvement, going from losing 13,000 jobs a month to losing 2,000 per month, but remains a net job loser on average.
Average hourly earnings grew 3.7% in June, down from 3.8% in May. This may be a sign of diminishing worker leverage even as job gains remain fairly solid overall.
The unemployment rate fell to 4.1% in June from 4.2%. Unemployment has sat in the 4–4.2% range since last May.
The labor force participation rate fell to 62.3%, the lowest since December 2022 as more Americans reach retirement age.
When zooming in on prime-age workers (25–54), labor force participation and the employment-population ratio both improved slightly in June. Both remain slightly below their recent peaks but are high by historical standards.
The Black unemployment rate jumped in June to the highest level since January 2022. This monthly data is volatile so take caution over-interpreting a single month, but this is consistent with a gradual rise in Black unemployment since early 2023.
To speak with Daniel Zhao about this report, please contact pr@glassdoor.com.
Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
