In a highly anticipated report on job growth from the Bureau of Labor Statistics on July 3, U.S. employers added 147,000 jobs in June, up from 139,000 in May, with the unemployment rate changing little at 4.1%. The unemployment rate has remained in a narrow range of 4% to 4.2% since May 2024. Job gains occurred in state government and healthcare. The federal government continued to lose jobs.
The news was a pleasant surprise, as economists had estimated that the U.S. labor market was likely to add 110,000 jobs, with the unemployment rate for June expected to come in at 4.3%, its highest level since October 2021. Uncertainty about tariffs has been cited by many as a hindrance to the job market. Many businesses have slowed down hiring and expansion because they don’t know what trade policy will be in the long run.
“There had been expectations that the June jobs report would indicate that businesses were holding back on hiring as a result of uncertainty around tariffs and elevated interest rates,” said Bright MLS Chief Economist Lisa Sturtevant. “But there were strong gains in employment in the healthcare sector, while state and local governments also ramped up hiring in June. The June report included a 7,000 drop in government employment but, again, this was far less than had been expected.
“(L)ower rates have not been enough to drive higher home sales activity,” she continued. “It is unlikely that we will see any significant drop in mortgage rates this summer. In addition, despite the positive headline numbers, other factors are weighing on prospective homebuyers and sellers, including concerns about future layoffs, rising prices for some consumer goods and high home prices. As a result, I expect the summer to be a continuation of the sluggish housing market we have had so far in 2025.”
The construction industry added 15,000 jobs, though the gains came largely in specialty and non-residential sectors. Residential construction jobs came in essentially flat, down 500 from last month, but up around 15,000 from a year ago.
Mortgage Bankers Association (MBA) SVP and Chief Economist Mike Fratantoni said the report shows that the labor market is holding up “reasonably well,” though he added buyers are likely still in wait-and-see mode.
“Potential homebuyers are likely to remain cautious unless, and until, the job market begins to improve again, or mortgage rates drop sufficiently to spur more activity.”
“The housing market, meanwhile, remains in a holding pattern,” added Realtor.com® Sr. Economist Jake Krimmel. “Realtor.com data show rising inventory for the 19th straight month, but sales are slowing. Homes are sitting on the market nearly a week longer than a year ago, and price cuts have reached record levels, indicating sellers are having a harder time finding a buyer—despite slightly lower mortgage rates in recent weeks.
“Looking ahead, the June CPI report (due July 15) and the Fed’s late-July meeting will be critical for mortgage rate watchers. The July 9 tariff decision could also reshape the inflation outlook and, combined with June’s above-expectation job growth, may keep the Fed cautious about cutting rates before September.”
The news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours and earnings by industry.
Among the major worker groups, the unemployment rate for Blacks (6.8%) increased in
June, while the rates for adult women (3.6%) and whites (3.6%) decreased. The jobless rates for adult men (3.9%), teenagers (14.4%), Asians (3.5%) and Hispanics (4.8%) showed little or no change over the month.
In June, the number of long-term unemployed (those jobless for 27 weeks or more) increased by 190,000 to 1.6 million, largely offsetting a decrease in the prior month. The long-term unemployed accounted for 23.3% of all unemployed people.
