By Ethan Faverino |

The U.S. labor market continued to expand in June, but at a significantly slower pace than economists expected, as hiring cooled and fewer Americans participated in the workforce, according to the latest Monthly Employment Update released last week by the Joint Economic Committee.

The economy added 57,000 non-farm payroll jobs in June, including 49,000 private-sector jobs and 8,000 government positions. While the national employment rate edged down from 4.3% to 4.2%, the improvement coincided with a 0.3 percentage-point decline in the labor force participation rate to 61.5%, indicating fewer Americans were either working or actively seeking employment.

The broader U-6 unemployment rate, which includes underemployment workers and those marginally attached to the labor force, also declined from 8.1% to 7.9%.

The June report follows downward revisions to previous employment data. The Bureau of Labor Statistics revised May’s job growth downward by 43,000 jobs, reducing the month’s gain from 172,000 to 129,000 jobs. April’s final revision, meanwhile, increased payroll growth by 33,000 jobs to a total gain of 148,000.

Among industries, private education and health services led monthly hiring with 69,000 new jobs, followed by professional and business services, which added 36,000 positions. Leisure and hospitality posted the largest decline, shedding 61,000 jobs, while the information sector lost 9,000 positions.

Over the past year, private education and health services has remained the nation’s strongest-performing sector, adding 648,000 jobs, followed by leisure and hospitality with 114,000.

Federal government employment experienced the steepest annual decline, falling by 258,000 jobs, while financial activities lost 100,000 positions.

Despite slower hiring, wages continued to outpace inflation. Average weekly earnings for all private-sector employees increased 3.82% over the past year, while average hourly earnings rose 3.52%.

Production and nonsupervisory workers saw annual increases of 3.73% in weekly earnings and 3.42% in hourly earnings.

Job Openings Hold Steady Despite Cooling Labor Market

Separate data from the Job Openings and Labor Turnover Survey showed labor demand remained relatively stable. Total job openings increased by 9,000 in May to 7.59 million nationwide, with the job openings rate holding steady at 4.6%

Leisure and hospitality recorded the largest increase in available positions, followed by trade, transportation, and utilities, while private education and health services posted the largest decline in openings.

State-level employment data reflected a mixed picture across the country. Unemployment rates declined in 20 states during May, increased in nine states, and remained unchanged in 22 states and the District of Columbia.

The District of Columbia recorded the nation’s highest unemployment rate at 6.1% while South Dakota posted the lowest at 2.1%

Payroll employment increased in 38 states and fell in 13 states during May. West Virginia recorded the nation’s largest percentage increase in payroll employment at 1.4% while Montana experienced the largest decline at 0.5%.

Arizona continued to rank among the nation’s stronger performing states for job growth despite signs of a slowing labor market.

The state added 2,000 net payroll jobs in May after adding 8,100 jobs in April. Over the past 12 months, Arizona has added 21,200 payroll jobs, tying for the 10th nationally in percentage growth of non-farm employment.

Arizona’s private sector added 22,900 jobs over the past year, ranking tied for ninth nationally in private-sector payroll growth.

Arizona’s unemployment rate increased slightly to 4.8% in May up from 4.7% the previous month and 4.3% one year earlier. Employment in the state declined by 16,293 during the month and has fallen by more than 66,000 over the past year.

The state’s labor force participation rate also weakened, falling from 61% to 60.7% in May, placing Arizona 37th nationally.

Nationally, labor force participation remained at 61.8% during May before declining to 61.5% in June.

Arizona’s strongest monthly employment gain came in construction, which added 1,300 jobs, and financial activities, which added 700 jobs. State and local government employment declined by 1,000 positions, while professional and business services lost 300 jobs.

Over the past year, Arizona’s private education and health services sector led all industries with 16,600 new jobs, followed by professional and business services with 8,100.

Financial activities experienced the largest annual decline, losing 4,000 jobs, while federal government employment fell by 3,200 positions.

Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.