June 2025 Jobs Report: U.S. Adds 200,000 Jobs, Unemployment Steady at 4.0% - What You Need to Know

The Federal Reserve is closely monitoring June's employment data to gauge potential interest rate adjustments.

UPDATE – July 3, 2024: This article now includes the newly released ADP employment figures from Wednesday.

Key Highlights

• The June jobs report, due Friday, is anticipated to reveal 200,000 new jobs added—slower growth compared to May's unexpected surge—with unemployment holding steady at 4.0%.
• Economists will focus on whether sectors like government, healthcare, and leisure & hospitality continue driving job creation.
• The Federal Reserve is watching for any signs of labor market softening that might accelerate interest rate cuts.

After a surprising jump in May, U.S. job growth likely decelerated in June. The Bureau of Labor Statistics' upcoming monthly employment report is expected to confirm 200,000 jobs added last month, maintaining the unemployment rate at 4.0%, according to economists surveyed by the Wall Street Journal and Dow Jones Newswires. This figure falls short of May's 272,000 new positions.

Goldman Sachs economists note that big data trends indicate a slower pace of hiring this spring, with layoffs ticking up slightly from historically low levels.

Federal Reserve policymakers remain vigilant as they have held interest rates at a 23-year high for nearly a year to combat inflation. Any weakening in the labor market could prompt earlier-than-expected rate reductions, benefiting consumers and investors alike.

Job Growth Concentrated in Select Sectors

Wells Fargo economists highlight that job gains remain heavily concentrated in healthcare, government, and leisure & hospitality sectors. Although these industries represent 36% of total employment, they account for 66% of job growth since last June. These sectors have rebounded strongly from pandemic-related job losses and are less impacted by rising interest rates.

"We anticipate these three sectors will continue providing significant support to payroll growth, surpassing their pre-pandemic contributions and sustaining overall job gains despite monetary policy pressures," explained Wells Fargo economists Sarah House and Aubrey George.

Nonetheless, these sectors are expected to contribute less momentum compared to previous months, with Wells Fargo forecasting a slowdown to about 150,000 monthly new jobs over the next year.

Federal Reserve’s Focus on Labor Market Signals

Additional labor market data from Wednesday's ADP employment report showed private sector job growth slowing for the third consecutive month, with 150,000 jobs added in June. Leisure and hospitality sectors accounted for over 40% of new positions. Unlike the BLS report, ADP data excludes government employment.

San Francisco Fed President Mary C. Daly recently warned that prolonged high interest rates could increasingly impact unemployment, possibly prompting the Fed to expedite interest rate cuts.

"While the labor market has adjusted gradually with only a slight rise in unemployment, we are approaching a threshold where this stable outcome becomes less likely," Daly stated.

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