Though Slowing, U.S. Labor Market Remains Strong

Hiring among U.S. employers slowed in June, but job growth remained at a healthy pace. The increase in hiring slightly outpaced economists’ projections and came amid persistently high interest rates and slowing consumer spending. Despite the increase in hiring, the unemployment rate edged higher as more people entered the labor force.

Employers added roughly 206,000 workers to payrolls in June 2024, according to a survey of businesses by the Bureau of Labor Statistics. Those additions came in below the 218,000 jobs gained in May (which was revised down) but were slightly above what economists were forecasting (190,000 to 200,000 jobs). The U.S. economy has now added jobs for 42 consecutive months, the fifth-longest period of job base expansion on record dating back to 1939.

Of note: The job counts for April and May were revised down. Downward revisions to April 2024 data showed 57,000 fewer jobs were added than previously reported, down to 108,000 positions. The May 2024 job growth number was revised down by 54,000 jobs to a total of 218,000 positions. With these revisions, employment gains in April and May combined were 111,000 jobs lower than previously reported.

Job gains in June were lower than the monthly average of around 220,000 jobs added over the previous 12 months but were still above pre-pandemic norms. From 2015 to 2019, the U.S. economy added an average of roughly 190,000 jobs each month.

On an annual basis, the nation gained roughly 2.61 million jobs as of June 2024. That was the weakest annual gain in over three years but still registered above the pre-pandemic average of around 2.4 million jobs added annually from 2015 to 2019.

The U.S. economy has recovered all the net jobs lost during the COVID-19 pandemic. As of June, the nation had 6.3 million more jobs (+4.2%) compared to the pre-pandemic employment level from February 2020.

Jobs by Industry

 Most of the 11 major industry sectors gained jobs in June. The most notable job base expansions were in Education and Health Services (+82,000 jobs) and Government (+70,000 jobs). Smaller gains were recorded in Construction (+27,000 jobs), Other Services (+16,000 jobs), Trade, Transportation and Utilities (+14,000 jobs), Financial Activities (+9,000 jobs), Leisure and Hospitality Services (+7,000 jobs) and Information (+6,000 jobs). Job losses were recorded in Professional and Business Services (-17,000 jobs) and Manufacturing (-8,000 jobs), while the number of jobs in the Mining and Logging sector was essentially unchanged from May to June.

Most major industries have recovered all the jobs lost during the COVID-19 pandemic downturn. Education and Health Services has seen the best recovery, with the June 2024 job count coming in roughly 1.77 million positions ahead of February 2020 numbers, closely followed by Professional and Business Services (+1.51 million jobs). Also well ahead of pre-pandemic norms was Trade, Transportation and Utilities (+1.31 million jobs).

The Leisure and Hospitality Services sector, which was the hardest-hit sector during the pandemic, has recouped all the jobs lost during that downturn. As of June, that sector had 14,000 more jobs than in February 2020, but that was just a 0.1% increase in the job base.

Employment in the Mining and Logging and Other Services sectors have yet to recover all the jobs lost during the COVID-19 downturn. The Mining and Logging industry was 50,000 jobs below its February 2020 level, while Other Services was 17,000 jobs in the hole. That put the June 2024 employment count in Other Services 0.3% below the pre-pandemic level, while the job base in Mining and Logging was 7.3% below the February 2020 level.


The unemployment rate (the U3 or headline unemployment rate, which is seasonally adjusted, is a survey of households) increased 10 bps from May to June, registering at 4.1%, the highest level since November 2021, but slightly above economists’ expectations of 4%. The recent unemployment rate ended a 30-month streak of rates at or below 4%. The rise in the unemployment rate came amid the labor force participation rate that increased from 62.5% in May to 62.6% in June.

From December 2021 to May 2024, the unemployment rate registered between 3.4% and 4%, averaging 3.7% during that period. At the onset of the pandemic, the unemployment rate climbed to 14.8% in April 2020. Prior to the pandemic, the unemployment rate clocked in at 3.5% to 5.7% from 2015 to 2019, averaging 4.4% during that five-year period. Prior to 2023, the unemployment rate hadn’t registered below 3.5% since 1969.

The total number of unemployed persons in the U.S. registered at roughly 6.81 million in June, up from about 6.65 million in May.

The unemployment rate for adult men (20 years and over) was unchanged from May to June, at 3.8%. The unemployment rate for adult women (20 years and older) rose 30 bps to 3.7%. Meanwhile, the unemployment rate for teenagers (16 to 19-year-olds) decreased 20 bps from 12.3% in May to 12.1% in June.

Average Hourly Earnings

Average hourly earnings among employees on private nonfarm payrolls rose $0.10 (+0.3%) from May to June. That monthly increase took average hourly earnings to $35.00 in June. On an annual basis, average hourly earnings were up $1.30, a 3.9% increase year-over-year. Overall wage growth continues to surpass rising prices, as the Consumer Price Index rose 3.3% annually in May. The Fed’s target for inflation is currently at 2%.

Wage growth over the past year was strong across most major industries. The largest increases in earnings from June 2023 to June 2024 were recorded among workers in Financial Activities (5.1%), Construction (4.9%), Manufacturing (4.8%), Mining and Logging (4.7%) and Professional and Business Services (4.3%). Smaller increases were among employees in Information (2.3%), Education and Health Services (3.1%), Trade, Transportation and Utilities (3.1%), Other Services (3.6%) and Leisure and Hospitality Services (3.8%).