Employers slowed their hiring in June. Here are the five things we learned from U.S. economic data released during the week ending July 4.
Payrolls expanded again in June, but half of the gain came from the public sector. Nonfarm payrolls expanded by a seasonally adjusted 147,000, following gains of 158,000 and 144,000 in April and May, respectively. The latter two figures reflected revisions by the Bureau of Labor Statistics that added 16,000 jobs to prior estimates. The private sector added a paltry 74,000 net jobs, slightly more than half of what it had added in April (+133,000) and May (+137,000). It was also the weakest pace of private sector hiring since last October. Healthcare/social assistance (+58,600) was responsible for most of the private sector’s job gains. Education at state and local governments drove much of the increase in public sector payrolls. Average weekly earnings of $1,241.46 were up 3.4 percent from a year earlier.
Based on a separate household survey, the unemployment rate slipped 1/10th of a percentage point to 4.1 percent. The labor force shrank by 130,000 people, resulting in a labor force participation rate of 62.3 percent. The 25-54 labor force participation rate increased by 1/10th of a percentage point to 83.5 percent. The typical length of unemployment swelled by 6/10ths of a week to 10.1 weeks, while the number of part-time workers who desire a full-time job narrowed by 159,000 to 4.465 million. The broadest measure of labor underutilization decreased by 1/10 of a percentage point to 7.7 percent.
Hiring slowed as the number of job openings grew in May. The Bureau of Labor Statistics estimates there were a seasonally adjusted 7.769 million unfilled jobs, up 374,000 for the month but off 1.7 percent from a year earlier. Private sector employers had 6.936 million open jobs, including at least 1 million positions in healthcare/social assistance, leisure/hospitality, and professional/business services. The manufacturers had 414,000 open jobs. Hiring slowed by 112,000 to 5.503 million people (-1.3 percent versus May 2024). Private sector employers hired 5.164 million workers. 5.242 million people separated from their jobs in May, down 71,000 for the month and 1.4 percent from a year earlier. This included 3.293 million people who had quit their jobs (+78,000 versus April 2025 and -1.8 percent versus May 2024) and 1.601 million layoffs (-188,000 versus April 2025 and -3.8 percent versus May 2024).
Purchasing managers report that manufacturing slowed and the service sector expanded in June. The Manufacturing PMI added a half point to 49.0. Even with the increase, the Institute for Supply Management index has remained below 50.0—the threshold between an expanding and contracting manufacturing sector—for four straight months. Indices for new orders and employment fell, while those for production and inventories improved during the month. Nine manufacturing industries reported growth, led by apparel, petroleum/coal products, and nonmetallic mineral products. The press release noted that “[t]ariffs-inducted prices growth accelerated.”
The ISM’s Services PMI moved back above 50.0 after one month to 50.8. The measure has been above 50.0 for 11 of the past 12 months. Indices for business activity/production, new orders, and inventories all increased during June, while that for employment declined. Ten service sector industries expanded during the month, including transportation/warehousing, utilities, and arts/entertainment/recreation. The press release shared that survey respondents most frequently noted “concerns about impacts related to tariffs.”
Factory orders—net of aircraft—were flat in May. New orders for manufactured goods surged 8.2 percent to a seasonally adjusted $642.0 billion. Year-to-date, the Census Bureau measure was up 3.2 percent from 2024 at $3.005 trillion. Transportation goods orders rose 48.3 percent, largely thanks to a massive gain in civilian aircraft orders. Net of transportation goods, orders were up by a far more modest 0.2 percent for both the month and the year-to-date comparison. Shipments inched up 0.1 percent to $599.4 billion, with year-to-date shipments ($2.951 trillion) up 0.7 percent over 2024. Unfilled orders jumped 3.4 percent to $1.455 trillion, while inventories expanded 0.1 percent to $944.1 billion.
The trade deficit expanded in May as trade activity slowed. Exports declined 4.0 percent to a seasonally adjusted $279.0 billion and imports slipped 0.1 percent to $350.5 billion. The resulting trade deficit of -$71.5 billion was up 18.5 percent from April. The Census Bureau and the Bureau of Economic Analysis estimate the year-to-date deficit at -$522.4 billion, 50.4 percent larger than the year-ago comparable (reflecting, among other things, importers attempting to get ahead of the ever-changing tariff situation). The goods deficit swelled by $11.2 billion to -$97.5 billion, while the services surplus narrowed $0.1 billion to +$26.0 billion. The former reflected declining exports of industrial supplies/materials (e.g., nonmonetary gold, natural gas, and finished metal shapes) and capital goods (e.g., semiconductors, civilian aircraft, and telecom equipment). The U.S. had its largest goods deficits with the European Union, Mexico, Vietnam, and China.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending June 28, 2025, First-Time Claims, seasonally adjusted): 233,000, -4,000 vs. the previous week, -5,000 vs. the same week a year earlier). 4-week moving average: 241,500 (+1.8% vs. the same week a year earlier).
- Vehicle Sales (June 2025, Automobile & Light Truck Sales, seasonally adjusted annualized rate): 15.342 million (-1.7% vs. May 2025; -3.1% vs. June 2024).
- Construction Spending (May 2025, Value of Construction Put in Place, seasonally adjusted annualized rate): $2.138 trillion (-0.3% vs. April 2025; -3.5% vs. May 2024).
The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.
What We Learned About the U.S. Economy Last Week 