June 2025 Employment Situation: A Mixed but Stable Picture
The June jobs report delivered a modest surprise: Nonfarm payrolls rose by 147,000, outpacing the consensus forecast of 110,000. That said, the headline number remains close to the 12 month average of 146,000, well below last year’s monthly pace of 250,000.
The unemployment rate ticked down to 4.1%, but the drop came largely from workers exiting the labor force, not exactly the signal of a red-hot market. In fact, underlying indicators point to a labor market that, while steady, is slowly cooling.
Job Growth Breakdown: Full-Time Takes the Lead
- Full-time employment surged by 437,000, while part-time roles fell by 367,000, signaling a shift in hiring strategy toward more permanent roles.
- Sector leaders in job creation:
- Healthcare: +39,000
- Leisure & Hospitality: + 20,000
- Government: + 73,000 (largely seasonal education hires)
- Federal Government: – 7,000 jobs lost
Revisions also painted a slightly rosier picture of spring: April and May job totals were revised upward by 16,000.
Signs of a Cooling Labor Market
Beneath the surface, momentum is softening:
- Wage growth remained subdued, up just 0.2% MoM and 3.7% YoY, the weakest pace since early 2022.
- Long-term unemployment (27+ weeks) surged by 190,000 to 1.6 million, now 23% of all unemployed.
- Private-sector job gains were the weakest in eight months.
- Temp help services slipped again, despite a less-dire revision to May’s figures (from a drop of 20,000 to just -5,700).
Bottom line: While June beat expectations, the broader trend continues to suggest a cooling though not collapsing labor market.
Job Openings (JOLTS) May 2025 Recap
The May JOLTS report showed job openings holding steady at 7.8 million, with notable sector shifts:
Increases:
- Accommodation & Food Services: +314,000
- Finance & Insurance: +91,000
Decreases:
- Federal Government: -39,000
Hires and separations were largely unchanged at 5.5 million and 5.2 million respectively, with the quits rate stable at 2.1%.
Labor Force Dynamics
- Prime-age labor force participation (25–54): Rose by 0.1% to 83.5%
- Overall labor force participation: Dipped to 62.3%, still 1.1% below its pre-pandemic level
- U-6 unemployment (includes discouraged and involuntary part-time workers): Held at 7.7%
Wages and Hours
Average hourly earnings:
- All employees: +$0.08 to $36.30
- Production/nonsupervisory: +$0.09 to $31.24
Average workweek:
- All employees: Down 0.1 hour to 34.2 hours
- Production/nonsupervisory: Down 0.2 hour to 33.5 hours
ADP Reports a Decline
In a divergence from BLS data, ADP reported a loss of 33,000 jobs in June, raising eyebrows and hinting at potential softness not fully captured by headline payroll numbers.
Looking Ahead
The next JOLTS report for June 2025 will be released on Tuesday, July 29, offering further clarity on the labor market’s direction.
Conclusion
June’s labor market performance was solid but unspectacular. While job growth beat expectations, the cooling trend is clear, particularly in wage growth, long-term unemployment, and hours worked. Employers appear cautiously optimistic, but with increasing signs of restraint.
Stay tuned for more updates as we track what’s next in the evolving employment landscape.
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Nick Andriacchi is the Chief Revenue Officer at Madison Resources, bringing over 30 years of experience in the funding and payroll industry. Before joining Madison, Nick held leadership roles at two other funding companies, where he built a reputation as a trusted advisor and strategic thinker. Widely regarded as a true industry expert, Nick is passionate about helping staffing firms grow through smart funding solutions and operational support.
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