June 2026 Jobs Report: U.S. Economy Added Jobs at a Strong Pace

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The U.S. economy added jobs at a brisk pace in June despite headwinds from high inflation and uncertainty over the economic impact of the war in Iran.

What are the main findings of the June 2026 jobs report?

The Bureau of Labor Statistics reported Thursday that employers added 57,000 jobs in June. This figure was lower than the estimate of economists surveyed by LSEG, who estimated the creation of 110,000 jobs.

The unemployment rate fell to 4.2%, which was also lower than the 4.3% estimate.

The U.S. economy added jobs at a slower pace than expected in June. (Al Drago/Bloomberg via Getty Images)

Revisions were made to the payroll figures for the previous two months, with April revised down by 31,000, from a gain of 179,000 to 148,000; while the May report was revised downward from 43,000 to a gain of 172,000 to 129,000.

Taken together, employment in April and May was 74,000 jobs lower than previously reported.

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Which sectors created or lost the most jobs in June 2026?

Private sector payrolls added 49,000 jobs in June, well below the LSEG poll’s forecast of 110,000 jobs. Private sector job gains in May were also revised down, from a gain of 120,000 to 97,000.

Government payrolls increased by 8,000 jobs last month, while May’s increase of 52,000 was revised down to 32,000 jobs.

The manufacturing sector added 3,000 jobs in June, in line with estimates from economists surveyed by LSEG. The May figures were revised downward from a gain of 7,000 jobs to a loss of 2,000.

Healthcare continued to add jobs last month, with the sector adding 21,500 jobs in June. That’s a slower pace than the average monthly gain of 38,000 over the past 12 months. Hospitals added 9,200 jobs during the month, contributing a significant portion of the increase.

Leisure and hospitality employment fell by 61,000 in June, reflecting weaker than usual seasonal hiring. The sector has so far shown little net change in employment over 2026.

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Federal Reserve Chairman Kevin Warsh and other Fed policymakers left interest rates unchanged at their meeting last month. (Al Drago/Bloomberg via Getty Images)

What does the June 2026 jobs report mean for the workforce?

The number of long-term unemployed, defined as those who have been out of work for 27 weeks or more, was little changed at 1.9 million in June but is up 286,000 on the year. The long-term unemployed represented 27.3% of all unemployed last month.

The number of people employed part-time for economic reasons also remained relatively stable at 4.7 million in June. These people would have preferred full-time employment, but worked part-time because their hours were reduced or because they were unable to find full-time employment.

The participation rate fell 0.3 percentage points to 61.5% in June, while the employment-to-population ratio edged down 0.2 percentage points to 59%. Both figures changed little over the year after accounting for annual population control adjustments.

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The leisure and hospitality sector shed jobs in June. (Daniel Acker/Bloomberg/Getty Images)

What experts say about the June 2026 jobs report

Jeffrey Roach, LPL’s chief economist, noted that “businesses continue to increase their payrolls, but hours worked are below pre-pandemic levels as businesses reduce their use of labor.”

“A worrying trend is the growing flow of people leaving the labor market altogether. For now, the labor market is holding up, giving the Fed an opportunity to stay focused on price stability,” Roach added.

Seema Shah, chief global strategist at Principal Asset Management, said the June jobs report “paints a bleaker labor market picture than investors are accustomed to, but it should ultimately be welcomed by markets.”

“The slowdown in payroll growth challenges the narrative of new labor market strength that has been building in recent months, but, more importantly, reinforces the idea that the Federal Reserve is under little pressure to tighten policy,” Shah said.

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What does this mean for interest rate cuts?

The Federal Reserve is expected to keep interest rates steady in the near term due to stubborn inflation that remains elevated above the central bank’s 2% target, although the market sees a strong possibility of rate hikes later this year.

The CME FedWatch tool shows a 41.8% probability that the Fed will raise the federal funds rate by 25 basis points from its current target range of 3.5% to 3.75%, compared to a 21.7% probability that rates will remain at their current level.

What does the June 2026 jobs report mean for the market?

The benchmark S&P 500 rose about 0.7% Thursday morning following the release of the June jobs report.

The Dow Jones Industrial Average rose about 0.6%, while the Nasdaq Composite rose just over 0.7%.

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