author avatar
Mark Chandik

Jul 6, 2026

A Muddy Jobs Report

The recent pickup in job growth is welcome news for job seekers. But June’s jobs report left more questions than answers. Here’s why.

Nonfarm payrolls rose by a smaller-than-expected 57,000 in June, according to the U.S. Bureau of Labor Statistics. In addition, April and May were revised lower by a combined 74,000.

Overall, it was not a particularly impressive month for payroll growth. However, employment data can be volatile from month to month. An uneven pattern is not unusual in the labor market.

As we’ve seen for some time, health care continues to be the engine of growth, generating 47,000 new jobs in June.

What really raised eyebrows, however, was the loss of 61,000 jobs in leisure and hospitality, the sector’s largest decline since late 2020.

Even more surprising, the drop occurred during a month when foreign visitors were flocking to the U.S. for the FIFA Club World Cup.

You’d expect hiring as companies staff up restaurants, bars, and maybe even hotels. But, at least according to the government’s survey, that didn’t happen. All that said, something seems amiss.  But if that’s the case, these anomalies tend to wash out over time.

Still, there was some good news. The unemployment rate fell to 4.2% in June from May’s 4.3%.

Notably, the jobless rate has remained within a fairly narrow range for two years, averaging 4.24% over that period.

Line chart of unemployment rate from 2023 to 2026, ending near 4.2%, with an average line shown as 4.24%. Data source noted at bottom.
What does the unemployment rate tell us? At its core, it helps answer whether job growth is strong enough to keep the jobless rate from rising, or better yet, strong enough to push it lower.

During that two-year period, the average monthly increase in nonfarm payrolls was 54,000.

Historically, that’s soft, but slow labor force growth has prevented the jobless rate from rising. Slow job growth offers little comfort to those seeking new jobs, but the number of unemployed remains reasonably low, according to government data.

author avatar
Mark Chandik

Reproduction Prohibited without Express Permission. Copyright FDP Wealth Management. All rights reserved. Advisory Services offered through FDP Wealth Management, LLC, a state Registered Investment Adviser and Valmark Advisers, Inc. a SEC Registered Investment Advisor. Securities offered through ValMark Securities, Inc., Member FINRA/SIPC. 130 Springside Drive, Suite 300, Akron, OH 44333-2431 800.765.5201 Prosperity Partners and FDP Wealth Management, LLC are separate entities from ValMark Securities, Inc. and Valmark Advisers, Inc. Prosperity Partners, FDP Wealth Management, LLC, ValMark Securities, Inc., Valmark Advisers Inc., and their representatives do not offer tax advice. You should consult your tax professional regarding your individual circumstances. Indices are unmanaged and cannot be invested directly in. Past performance is not a guarantee of future results.

Indices are unmanaged and do not incur fees, one cannot directly invest in an index. You should consult your tax professional regarding your individual circumstances. This information is provided by Financial Jumble, LLC. Financial Jumble, LLC is a separate entity from ValMark Securities, Inc. and ValMark Advisers, Inc.

RELATED POSTS

Rising Mortgage Rates: A Consequence of Higher Treasury Yields

Mortgage rates have moved sharply higher in recent months, creating a noticeable headwind for homebuyers and homeowners looking to refinance.

When Bad News Is Good News

Released by the US Bureau of Labor Statistics (BLS), September’s nonfarm payroll report came in lighter than expected, and the unemployment rate unexpectedly inched higher.

Rising Bond Yields and the Stock Market

“Bond Selloff Deepens After 30-Year Yield Hits Highest Level Since 2004,” declared Bloomberg News last week. CNBC echoed the sentiment with “10-Year Treasury Yield Rockets to 19-Year High.”

The Fed Hikes Rates: What Investors Should Know

In his opening remarks in a speech last month at the Federal Reserve Bank of Kansas City’s Economic Symposium, Fed Chief Kevin Warsh said, “(Event) planners have some recreation options lined up for later today.

A Hotter August CPI Builds Rate Hike Momentum

First, let’s clarify that any attempt to predict the Federal Reserve’s actions this week is, at best, an educated guess. Fed Chair Kevin Warsh has struck a hawkish tone, and the odds of a quarter-point increase in the fed funds rate are 87%, according to the CME Group. It was 59% on September 4.