Hiring surged in June, shrugging off economic worries

Employers across the U.S. added 147,000 jobs in June, with the labor market remaining resilient despite slowing economic growth this year. That figure is in line with the average monthly gain of 146,000 over the last year, according to the Labor Department.

Job growth was stronger than expected in June. Payroll gains sailed past the 115,000 predicted by economists polled by financial data firm FactSet.

The nation's unemployment rate ticked down to 4.1%, down from 4.2% in May and the lowest since February. The jobless rate came in below economist forecasts of 4.3%, according to FactSet.

June's employment data shows that the labor market means solid even amid significant uncertainty over U.S. trade and fiscal policy. The upshot is that employers continued to add jobs at a steady pace.

Government employment rose the most in June with 73,000 jobs added, driven by gains in the state and local government education sectors. The federal workforce continues to shed jobs, with 7,000 lost in June. Massive cuts in federal jobs by the Department of Government Efficiency, or DOGE, earlier this year have gutted several key agencies. Outplacement firm Challenger, Gray & Christmas says DOGE layoffs have accounted for nearly 287,000 cuts so far this year.

The health care sector added 39,000 jobs.

The Labor Department also revised up its numbers for April and May by a collective 16,000, a further indication the job market remains on solid ground.

While the labor market remains sturdy, economists expect growth to slow in the second half of the year. Federal Chair Jerome Powell has said tariffs could start to hobble economic activity and drive up inflation this summer. At a gathering of central bankers in Portugal earlier this week, Powell said the Fed has held off lowering interest rates this year because of President Trump's tariffs.

Economists underlined that the labor market continues to persevere despite considerable economic uncertainty.

"Today's stronger jobs report confirms a still resilient U.S. labor market, defying, at least for now, the signs of weakness seen in some leading indicators," Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management, said in a research note.

The healthy level of job growth likely means the Fed will hold off cutting rates at its meeting this month, experts say. At its most recent meeting, the central bank penciled in two rate cuts by year-end, although some economists predict just one.

Nancy Vanden Houten, lead U.S. economist at Oxford Economics, thinks U.S. inflation stemming from tariffs is likely to peak by the fourth quarter, giving the Fed room to lower rates in December to propel economic growth.

"While there were some elements of softness beneath the better-than-expected headlines, the June employment report was strong enough to allow the Federal Reserve to keep policy on hold as it monitors the impact of tariffs on inflation," she said in a report.

Bret Kenwell, an investment analyst at eToro, said the latest job numbers could lead to a relief rally for U.S. stocks. The markets close early today and will not be open on Friday due to the July 4 holiday. Stocks were up slightly after the opening bell.