The US job market delivered a stronger-than-expected performance in June, adding 147,000 jobs and pushing unemployment down to 4.1%. However, beneath the headline numbers lies a more complex picture of economic uncertainty driven by the Trump administration’s trade and immigration policies.
Job Growth Concentrated in Select Sectors
Despite beating expectations of 117,500 new jobs, the June employment gains reveal concerning patterns about the breadth of economic growth. The vast majority of new positions emerged in just three sectors: healthcare added 58,600 jobs, leisure and hospitality contributed 20,000, and state and local government accounted for 80,000 positions.
When government jobs are excluded, private sector employment grew by only 74,000 positions—the smallest monthly gain since October 2024. This narrow job creation signals that economic opportunities remain limited to specific industries rather than reflecting broad-based growth.
“The tariff tax hike, restrictive monetary policy and worries about a further intensification of the trade war are weighing heavily on labor demand,” noted Samuel Tombs, chief US economist at Pantheon Macroeconomics. Private payrolls excluding healthcare and education rose by just 23,000, well below the previous 12-month average of 50,000.
Labor Market Dynamics Reveal Deeper Concerns
The job market’s underlying health shows troubling signs beyond the headline numbers. Black worker unemployment surged by 0.8 percentage points to 6.8%—its highest level since January 2022. Historically, rising unemployment among Black workers has served as an early indicator of broader economic weakness.
Workers are also struggling to find new employment once unemployed. Job seekers now remain unemployed for roughly six months on average, with 23.3% of unemployed workers having been out of work for 27 weeks or longer—approaching a three-year high.
Meanwhile, wage growth disappointed economists’ expectations, with average hourly earnings rising just 0.2% to $36.30, bringing annual wage growth down to 3.7% from 3.9%.
Federal Reserve Faces Policy Dilemma
The mixed employment data creates a challenging environment for Federal Reserve policymakers who had anticipated cutting interest rates this year. Trump’s tariff policies have raised concerns about renewed inflation pressure, keeping the Fed on the sidelines despite some economic softening.
Immigration policy changes add another layer of complexity. Economists estimate the breakeven employment level—jobs needed to keep pace with population growth—has fallen from pre-pandemic levels of 70,000-100,000 monthly jobs to potentially just 50,000-100,000, depending on immigration flows.
This shifting baseline means June’s 147,000 jobs could actually be inflationary if the labor force continues shrinking, potentially forcing the Fed to maintain higher rates longer than originally planned.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief. Before making any investment decisions, you should always conduct your own research. Coinbrief is not responsible for any financial losses
