US Labor Market Adds Only 57,000 Jobs in June

The latest Labor Department report shows that the US economy added only 57,000 new jobs in June, falling short of economists' expectations. This is the clearest sign yet that the low-hire, low-fire labor market has become a long-term reality.

Layoffs remain rare, but hiring did not pick up the slack to offset this trend. The unemployment rate remains near 4.2%, with the only thing holding it back being the infrequent layoffs. Young workers are feeling the brunt of this adjustment, with their employment-to-population ratio falling sharply since April 2023.

The Federal Reserve Bank of St. Louis found that in a low-hire economy, firms tend to hold onto existing staff while cutting back on new openings. This has resulted in a 2.2 percentage point increase in the unemployment rate for recent college graduates due to the broader slowdown alone.