Economy disappoints with half as many jobs created in June, and May and April gains revised downward

U.S. employers pulled back on hiring last month and added only 57,000 jobs, less than half the previous month’s total and a sign companies still have a cautious economic outlook. The Labor Department said Thursday that the unemployment rate declined to a low 4.2% from 4.3% in May, though the decline mostly occurred because many people out of work gave up looking and were no longer counted as unemployed. The figures suggest businesses remain wary of the economy’s health, with inflation at a three-year high and consumer confidence near post-pandemic lows. The solid job gains that were initially reported in April and May were also revised lower. Hiring in May was marked down to 129,000 from 172,000, while April’s job gains are now 148,000, down from an initial estimate of 179,000. Restaurants, bars, and hotels cut 61,000 jobs, a sharp disappointment for those who expected the World Cup tournament that is taking place in multiple U.S. cities would lead to at least temporary job gains. Retailers also shed 7,500 jobs. Many businesses may be wary of hiring as they navigate the implementation of artificial intelligence, but last month professional and business services, a category that includes architecture, engineering, and software developers — occupations expected to be vulnerable to AI — added 36,000 jobs. Healthcare, the economy’s most consistent job creator, added nearly 47,000 positions. The economy is growing modestly despite ongoing challenges. It expanded at a 2.1% annual pace in the first three months of the year, though some forecasts expect it will slow in the April-June quarter. But a job market that can continue to generate at least some jobs should enable many consumers, particularly upper-income ones, to remain resilient and spend more. Ongoing job gains, however, suggest that the Federal Reserve’s key interest rate, at about 3.6%, may not be high enough to restrain the economy and cool inflation. Fed chair Kevin Warsh in Portugal Wednesday reit