Washington, D.C. — The economy added just 57,000 jobs in June, roughly half of what was projected in economists’ forecasts, signaling continued weakness in the labor market, according to a new Center for American Progress analysis released today.
While the unemployment rate declined slightly to 4.2 percent, this decline was driven in part by workers leaving the labor force, which shrank by 720,000 people in June. The monthly report also revised April and May payroll gains downward by a combined 74,000 jobs, underscoring a broader slowdown in hiring. At the same time, inflation likely continued to outpace wage growth in June, eroding workers’ purchasing power, while employment growth over the past year remains concentrated in lower-paying industries even as higher-paying sectors continue to lose jobs.
“Workers can’t get ahead when their paychecks buy less each month,” said Aurelia Glass, policy analyst for the American Worker Project at CAP and co-author of the analysis. “This labor market is slowing as inflation continues to outpace wage growth, and working families are falling further behind.”
The Trump administration has weakened policies that help workers secure higher wages, including making it more difficult for workers to organize unions and taking steps to reduce minimum wage protections for millions of private sector employees in the industry that saw the strongest job growth.
Key findings include:
- Hiring slowed in June. The economy added 57,000 jobs, roughly half of what economists expected, while payroll gains for April and May were revised downward by a combined 74,000 jobs, indicating the labor market was weaker than previously reported.
- Real wages are expected to fall for a third straight month. The Federal Reserve Bank of Cleveland estimates that June inflation will decrease slightly, to 3.92 percent, from the prior year, outpacing nominal wage growth for the third month in a row. This continues a trend in which price increases have outpaced wage growth and reduced workers’ purchasing power.
- Workers have lost roughly a year and a half of wage gains. By May 2026, elevated inflation had effectively erased recent wage growth, leaving workers with inflation-adjusted earnings comparable to those of January 2025.
- Middle-class industries continue to lose ground. Since June 2025, the economy has added 762,400 jobs in industries that pay below the private sector average while losing 40,800 jobs in industries that pay above the private sector average. Over the same period, employment fell by 38,000 jobs in manufacturing, an industry that has traditionally provided pathways to the middle class for workers without college degrees—and one that the Trump administration claimed its tariff policies would boost.
- Higher costs continue to strain household budgets. The average household has spent an additional $3,100 on goods and services since January 2025, contributing to persistently weak consumer sentiment.
Read the analysis: “June Jobs Numbers Are Not the Boost for Workers That Was Expected” by Kennedy Andara and Aurelia Glass
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].