Unexpected Surge in U.S. Job Growth in June: Government Sector Leads

U.S. job growth defied expectations in June, largely driven by government employment, while private sector gains remained subdued. Manufacturing and retail faced challenges from increasing import tariffs under the Trump administration, according to a Labor Department report.

The unemployment rate edged down to 4.1% from 4.2% in May, though this was partly due to individuals leaving the labor force. Meanwhile, the average workweek shortened, indicating that businesses are likely cutting hours amid intensifying economic challenges.

Although nonfarm payrolls increased by 147,000 jobs last month, the growth was concentrated in specific areas, like state and local government education, while federal positions continued to decline. The private sector added only 74,000 jobs, marking the smallest rise since October 2024.

(With inputs from agencies.)