Updated on July 2.
June hiring came in under expectations
Unemployment was 4.2% in June, down 0.1 percentage point from May, according to the June jobs report released by the Bureau of Labor Statistics on July 2.
Total employment rose by 57,000 — the lowest rise in four months. The gains were well below forecasts of 110,000 and a far cry from the 129,000 increase in jobs in May.
Another worrying sign remains: Similar to May, long-term unemployment affected 1.9 million jobseekers in June and is up by 286,000 over the year. Those who have been jobless for 27 weeks or more comprise 27.3% of all those unemployed, compared to 21.2% last June.
Job gains:
- Professional and business services(+36,000).
- Social assistance (+25,000).
- Health care(+22,000)
Job declines:
- Leisure and hospitality (-61,000)
What are the weekly jobless claims?
Initial jobless claims went down for the week ending June 27, according to the report released on July 2.
Why it matters: The weekly jobless claims, or initial claims, are the number of unemployment insurance claims filed in the past week. They provide an indicator of the strength — or weakness — of the labor market.
Learn more about this week's jobless claims
Jobless claims were 215,000 for the week ending June 27, down by 1,000 from the previous week’s revised level of 216,000.
The new four-week moving average — a measurement of the number of people who filed for unemployment insurance for the first time over the last four weeks — was 220,000, down by 2,500 from the previous week's revised average of 224,500.
What's the insured unemployment rate?
Not all types of unemployment are included as part of the insured unemployment rate. It only includes "covered unemployment," as in people who receive unemployment benefits. Those who quit their jobs, for example, aren't included in the insured unemployment rate because they aren't eligible for unemployment benefits.
The advance seasonally adjusted insured unemployment rate — the rate of continuous covered unemployment claims divided by covered employment — was 1.2% for the week ending June 20, unchanged from the previous week’s unrevised rate.
Job openings change little in May
There were 7.6 million job openings in May, unchanged from April, according to the latest Job Openings and Labor Turnover Summary (JOLTS), released on June 30. The number of openings in May is roughly 284,000 higher than last year at the same time.
The unemployment rate decreased by 0.1 percentage point in June at 4.2%, compared to May, according to the June jobs report released on July 2 by the Bureau of Labor Statistics (BLS).
Here’s what NerdWallet senior economist Elizabeth Renter had to say about the report:
Job growth slowed last month, even more than expected, and gains in the prior two months were revised down. But this isn’t cause for alarm. The unemployment rate remains in good territory, as does the slow, steady growth in jobs amid demographic changes and some economic uncertainty.
The labor force is aging and immigration policies have stymied a major source of continued labor force growth. These labor supply issues can act as a drag on the economy. Still, employers across industries have been adding jobs in 2026. There were 92,000 jobs added, on average, in each of the first six months of the year. There’s bound to be some fluctuations from month to month, so this past month’s slowing can be taken in stride until there is any additional evidence of trouble.
That — the labor market is OK — phrasing is useful from a macro perspective, but job seekers or would-be job seekers may see it differently. That’s often the way it goes with these big-picture numbers. It can be simultaneously true that employers are adding jobs amid a fairly stable labor market and you are having trouble finding work. Paired with the very real affordability constraints brought on by inflation and right now could be a painful time for the 7 million people who are out of work.
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What is the current unemployment rate?
The current unemployment rate is 4.2% for June, compared to May (4.3%).
The unemployment rate has risen since hitting a 50-year low of 3.4% in April 2023. Since May 2024, the unemployment rate has mostly stayed between 4% and 4.2%.
How the unemployment rate is calculated
The unemployment rate is calculated by dividing the number of unemployed people by the number of people in the labor force. (The labor force is considered the sum of those who are currently working or looking for work.) The result is then multiplied by 100 to get a percentage:
Number of unemployed people / Labor force x 100 = X%, which is the unemployment rate
Will unemployment go up soon?
The labor market showed signs of weakening throughout 2025 and that trend has continued into 2026.
The recent rise in unemployment was a byproduct of monetary policymakers’ effort to curb inflation by hiking interest rates. The Federal Reserve raised the federal funds rate 11 times between March 2022 and July 2023. Now that inflation is consistently slowing, the Fed has taken steps to prevent unemployment from rising further.
The Fed cut rates in 2024 at its September, November and December meetings. It paused rates at every meeting so far in 2025, but has indicated that there could be some rate cuts in 2025.
The Fed cut rates three times in 2025 before pausing in January. It also paused rates in March and April.
» MORE: What is the minimum wage?
Are wages increasing?
Wage growth is lower than it was a year ago and now closer to pre-pandemic levels, according to data from the Federal Reserve Bank of Atlanta. The three-month moving average of median hourly wage growth — when measured over the previous 12 months — has slowed from its peak in the summer of 2022.
For April, the three-month wage growth percent change was 3.6%, down from 3.9% in March.
What does the Employment Cost Index show?
Increases in compensation costs in the first quarter of 2026 matched the last quarter of 2025 but were slower than a year ago, according to the most recent quarterly BLS Employment Cost Index, which measures wage and salary growth. Wages and salaries, as well as benefits, comprise total compensation costs.
The March 2026 report, released on April 30, shows compensation costs increased by 0.9% in the first quarter of 2026.
Year-over-year measurements show that compensation cost increases held steady in Q1 2026 (3.4%), matching the pace of the last quarter of 2025, but slower than the rates seen throughout 2024.
- Q1 2026: 3.4%
- Q4 2025: 3.4%
- Q3 2025: 3.6%
- Q2 2025: 3.6%
- Q1 2025: 3.6%
- Q4 2024: 3.8%
- Q3 2024: 3.9%
- Q2 2024: 4.0%
- Q1 2024: 4.2%
For the 12-month period ending in March 2026, wages and salaries increased 3.5%, compared to 3.3% for December 2025.
Benefit costs had a higher increase in the 12-month period ending in March (3.8%) compared to December (3.4%).
More key jobs data and what it means
What happened in June?
The economy grew by 57,000 jobs in May, according to the BLS, while economists had expected greater gains. Here’s how many jobs were added in previous months.
- 129,000 in May
- 148,000 in April.
- 214,000 in March.
- -156,000 in February.
- 160,000 in January.
- 48,000 in December.
- 41,000 in November.
- -173,000 in October.
- 119,000 in September.
- -4,000 in August 2025.
- 72,000 in July 2025.
- -13,000 in June 2025.
What is the labor force participation rate?
The labor force participation rate went down by 0.3 percentage point from May (61.8%) to June (61.5%), according to the Bureau of Labor Statistics.
Why it matters: The labor force participation rate is the percentage of the population that is working or looking for work.
The rate is calculated as the labor force divided by the total population that’s eligible to work. (The Bureau of Labor Statistics defines the total population that’s eligible to work as the “civilian noninstitutional population,” which refers to people ages 16 and older who are not in military service or incarcerated.) The result is multiplied by 100 to get a percentage:
Labor force / Civilian noninstitutional population x 100 = X%, which is the labor force participation rate
Since October 2002, the labor force participation rate was lowest in April 2020 (60.1%) and highest in June 2003 (66.5%), according to BLS data.
How many job openings were there in May?
The latest Job Openings and Labor Turnover Summary (JOLTS), released on June 30, shows job openings were 7.6 million in May compared to:
- 7.6 million in April
- 6.9 million in March
- 6.9 million in February
- 7.2 million in January 2026
- 6.6 million in December 2025
- 6.9 million in November 2025
- 7.4 million in October 2025
- 7.7 million in September 2025
- 7.2 million in August 2025
- 7.2 million in July 2025
- 7.4 million in June 2025
- 7.7 million in May 2025
The seasonally adjusted job openings rate was 4.6% in May, unchanged from April. The job openings rate in May 2025 was 4.4%.
The number of job openings rose in wholesale trade (+71,000).
What is the layoff rate?
The rate of layoffs in May (1.1%) was unchanged from April, according to the most recent JOLTS report.
Layoffs decreased in arts, entertainment and recreation (-42,000).
What is the quit rate?
The JOLTS report also shows the quit rate in May was 1.9%, unchanged from April. Quits increased in the federal government (+4,000).
Why it matters: Economists say quit rates are a key factor in the health of employment prospects since quitting shows that workers feel safe making a job switch within their sector or outside it entirely.
The current quit rate is slightly below pre-pandemic levels after peaking at 3% in both Nov. 2021 and April 2022.
When is the next jobs report?
The next jobs report will show data for July and it will be released on Aug. 7.
(Photo by Spencer Platt/Getty Images News via Getty Images)
