June jobs report: No fireworks

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 Chief Economist Daniel Zhao.

The fireworks show was cancelled for the job market as the June jobs report came in weaker than expected. Payroll growth in June came in below expectations, April and May gains were revised downward and even the unemployment rate decline was driven in part due to a falling labor force. The downward revisions and deceleration in jobs growth reverse some of the optimism in recent months that the job market had been on the verge of accelerating to a new pace, leaving workers waiting still a little longer for a hotter job market to alleviate their frustration.

Key stats

No World Cup boost to jobs

With the World Cup underway, several industries that may have benefited from the international sporting event are seeing little improvement in employment in June. Leisure & hospitality is the most obvious industry to benefit with June job gains, but the industry lost 61,000 jobs in June, on a seasonally adjusted basis. Leisure & hospitality subindustries like performing arts, spectator sports, and related industries (-9,000), accommodation (-21,700) and food services & drinking places (-32,900) all underperformed in June.

Other less obvious beneficiaries of the World Cup may include temporary help services (+9,300), which includes many temp workers who may be brought on by staffing firms rather than directly hired by hospitality & entertainment businesses. Local governments excluding education may also benefit (+3,300) as local governments staff up emergency services and other staff to support the event. However, the increases here are relatively minor and any World Cup boost in employment is ultimately expected to be temporary once the event is over.

Wage growth rises but energy prices still bite

Energy prices may have peaked as the U.S. and Iran negotiate. The accumulated run-up in energy prices so far, however, has been enough to drive CPI inflation to 4.2% year-over-year as of May 2026. June CPI data will be published on July 14, but annual inflation-adjusted wage growth may be negative for another month with today’s report showing wages growing at 3.5% year-over-year, an improvement from May, but likely not enough to outweigh rising energy costs for American households.

Slight optimism for the Class of 2026 

June marks the end of the school year and that raises the question of how the job market for recent grads is faring. Unemployment for 20–24 year olds declined in June, falling to 7.1% from 7.2% in May. That is also an improvement from 8.2% last June. And unlike the overall work force, the improvement in unemployment was married with a slight uptick in labor force participation from 70.5% to 70.6% in June. Recent grads have faced a difficult job market over the last few years, but there are some signs that the Class of 2026 faces a slightly improved hiring picture.

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The unemployment rate fell to 4.2% in June, down from 4.3% in May, but it fell for the wrong reasons. The decline was driven in part by the labor force participation rate falling sharply to 61.5%, its lowest level since March 2021.

Sometimes declining labor force participation can be chalked up to the aging of the workforce. Because the labor force participation rate counts workers of all ages, Baby Boomer retirements can pull the overall rate down. Usually, economists focus on the prime-age (25–54) labor force participation rate to mitigate the effect of retirements. Unfortunately, in June, prime-age (25–54) labor force participation was also down sharply to 83.3%, at its lowest level since March 2025.

Similarly, the prime-age employment-population ratio fell to 80.2%, its lowest level since December 2022. These swings seem unusually large so more data is needed to determine if this is a real trend. In the interim, nothing obvious jumps out as the cause for any data issues. For example, household survey response rates were not unusually low in June compared to recent months.

The unemployment rates by race were not significantly different from May to June with a slight uptick for Asian & Hispanic/Latino workers, a slight downtick for white workers, and no change for Black or African American workers. These measures are volatile month-to-month, so it is prudent to look at the longer term trend rather than focusing on 1-month changes.

Payroll growth has slowed over the last few months, with revisions especially disappointing given that the initial reports had provided hope that the job market may have been reaccelerating. However, jobs growth over the last 3 months averages 111,333, which is still a healthy figure.

It had seemed like jobs growth was broadening out beyond health care in recent months. It's just one month, but June is back to the old trend of health care & social assistance driving most of our job gains (82%).

With a longer view, the first half of 2026 is still looking better than second half of 2025 with improvement in a variety of industries: professional & business services, education, construction, manufacturing, retail, transportation & warehousing, and government.

Information (which includes tech and media), finance, leisure & hospitality are trending softer in 2026 compared to the end of 2025.