The United States added 147,000 jobs in June, far exceeding forecasts thanks to a strong increase in public sector hiring, while the private sector remains weak.
The latest employment report shows the unemployment rate has dropped to 4.1%, but private job growth only reached 74,000, the lowest since last October.
MAIN CONTENT
The public sector is significantly increasing hiring, while private sector employment growth is slowing.
The trade war and tight monetary policy negatively impact private employment.
The labor market remains stable but shows cautious signs from economists and financial experts.
How did the United States' job growth perform in June 2025?
Data from the U.S. Bureau of Labor Statistics shows an addition of 147,000 new jobs in June 2025, primarily from a surge in public school system hiring. The unemployment rate fell to 4.1%, indicating a decrease in the number of unemployed individuals seeking work.
The hiring boom at local and state schools accounts for much of this positive result, while the private sector only added 74,000 jobs, the lowest since last October. Notably, the healthcare sector added only 59,000 jobs, marking the lowest figure in the past four months.
The impact of trade policy on hiring decisions
Pantheon Macroeconomics Chief Economist Samuel Tombs analyzes that businesses are sharply reducing hiring due to the impacts of increased tariffs under the Trump administration, combined with tight monetary policy. He emphasizes that private labor demand is slowing despite public labor increases.
“Ignoring job growth in the education sector; private labor demand is weakening due to tariff policies and tight monetary conditions.”
Samuel Tombs, Chief Economist, Pantheon Macroeconomics, July 2025
Sectors such as manufacturing, wholesale trade, and business services are actually reducing headcount. Although the leisure and hospitality sector saw an increase of 20,000 jobs, this number is offset by downward adjustments in May's figures. This indicates that private sector hiring is under significant pressure due to ongoing tariff policies.
Market reaction and monetary policy forecast
The market's immediate reaction in the stock and financial markets was reflected in rising bond yields, a stronger USD, and a higher opening for the S&P 500 index. Experts believe this employment result will give the U.S. Federal Reserve (Fed) more time to delay interest rate cuts.
“The labor market remains resilient, despite slowing production, and real average hourly earnings have the largest growth in a year.”
Joe Gaffoglio, CEO Mutual of America Capital Management, July 2025
The employment report is compiled from employer and household surveys. There are fewer unemployed people, but the labor force participation rate is decreasing, a sign that many may have given up looking for work. Many experts, such as Ian Lyngen of BMO, note that despite the positive data, the Fed has no reason to change interest rates in July and is focused on the September meeting.
Labor market outlook and Fed policy
Experts from LPL Financial and Goldman Sachs say businesses still intend to expand despite risks from the trade war and low inflation. However, the labor market may not remain stable for long if inflation does not rise again, which would make it easier for the Fed to return to easing policies.
Allison Schrager from the Manhattan Institute points out that the U.S. economy is still exceeding expectations despite many anticipating a slowdown. The JOLTS report and inflation data further reinforce the current solid labor market picture, while policymakers are closely monitoring subsequent developments.
Positive points and main challenges in the June employment report
Job sector increase/decrease (June 2025) Evaluation Public school system +73,000 Strong hiring, creating most new jobs Healthcare +59,000 The weakest increase in the last 4 months Leisure and hospitality +20,000 Slight increase, offset by downward adjustments in May's figures Manufacturing, trade, business services - Layoffs, reflecting weakness in the private sector
Frequently Asked Questions
What are the highlights of the U.S. June 2025 employment report?
An additional 147,000 jobs, mainly from public sector hiring, while the private sector is weak, with the unemployment rate dropping to 4.1% (Source: BLS, 2025).How does the trade war affect the labor market?
Tariffs and trade policy exert downward pressure on private hiring, slowing job growth outside the public sector (Analysis: Samuel Tombs, 2025).How will the Fed adjust interest rates based on this employment report?
Experts believe the Fed may delay rate cuts at least until September 2025 due to the stable labor market (Ian Lyngen, 2025).What does a declining labor force participation rate mean?
It indicates that workers may not be continuing to seek jobs, reducing the total number of people able to work in the economy (Source: BLS, 2025).How does inflation affect employment?
Real hourly earnings are increasing but still low, preventing the Fed from feeling immediate pressure to ease policy, thereby helping to control inflation more effectively (Joe Gaffoglio, 2025).
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