The breakdown of June jobs report suggests that growth has become increasingly uneven as the labor market shows signs of softening.
U.S. nonfarm payrolls grew by 206,000 in June, according to the Labor Department, but the job gains were narrow. Health care and social assistance added 82,400 jobs, while government increased by 70,000 positions. Several categories saw employment shrink, including manufacturing.
Health care and social assistance has been a key component of the labor market recovery since the pandemic. Ambulatory health services added 22,000 jobs in June, while hospitals grew their payrolls by 21,700.
Meanwhile, education accounted for 17,200 of the jobs added in the government sector. Both state and local governments added jobs outside of education, as well.
Professional and business services was a weak spot, shedding 17,000 jobs. Jeffrey Roach, chief economist at LPL Financial, pointed out that the unemployment rate ticked up among workers with at least a bachelor’s degree
“The increase in the unemployment rate, especially for those with at least a Bachelor’s degree, suggests a modest cooling of the labor market. So far, we don’t see apocalyptic signs within the labor market, but investors should be wary when the labor market is supported by government payrolls,” Roach said in a note Friday morning.
One potential bright spot within the report was construction, which gained 27,000 jobs. That’s an increase from the average gain of 20,000 over the past year, according to the Labor Department.
