Unemployment Rate Falls Slightly to 4.1 Percent

July 7, 2025 – Employment rose by 147,000 in June as the U.S. unemployment dropped to 4.1 percent, according to the most recent U.S. Bureau of Labor Statistics report. Job gains occurred in state government and healthcare. Federal government continued to lose jobs. The number of unemployed people, at 7.0 million, changed little over the month.

Both the unemployment rate, at 4.1 percent, and the number of unemployed people, at 7.0 million, changed little in June. The unemployment rate has remained in a narrow range of 4.0 percent to 4.2 percent since May 2024. Among the major worker groups, the unemployment rate for Blacks (6.8 percent) increased in June, while the rates for adult women (3.6 percent) and Whites (3.6 percent) decreased. The jobless rates for adult men (3.9 percent), teenagers (14.4 percent), Asians (3.5 percent), and Hispanics (4.8 percent) showed little or no change over the month.

In June, the number of long-term unemployed (those jobless for 27 weeks or more) increased by 190,000 to 1.6 million, largely offsetting a decrease in the prior month. The long-term unemployed accounted for 23.3 percent of all unemployed people. The labor force participation rate changed little at 62.3 percent in June, and the employment-population ratio held at 59.7 percent.

The number of people employed part time for economic reasons, at 4.5 million, changed little in June. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. The number of people not in the labor force who currently want a job was essentially unchanged at 6.0 million in June. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force increased by 234,000 in June to 1.8 million. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the four weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, increased by 256,000 in June to 637,000.

Where Job Growth Occurred

• Government employment rose by 73,000 in June. Employment in state government increased by 47,000, largely in education (+40,000). Employment in local government education continued to trend up (+23,000). Job losses continued in federal government (-7,000), where employment is down by 69,000 since reaching a recent peak in January. (Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.)
• Healthcare added 39,000 jobs in June, similar to the average monthly gain of 43,000 over the prior 12 months. In June, job gains occurred in hospitals (+16,000) and in nursing and residential care facilities (+14,000). In June, social assistance employment continued to trend up (+19,000), reflecting continued growth in individual and family services (+16,000).

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• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; professional and business services; leisure and hospitality; and other services.

The Private Sector

Private sector employment shed 33,000 jobs in June and annual pay was up 4.4 percent year-over-year, according to the June ADP National Employment Report produced by ADP Research in collaboration with the Stanford Digital Economy Lab (Stanford Lab). The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.

Job losses in professional and business services, and education and health services led the decline. Leisure and hospitality, and manufacturing showed gains. Economists polled by Reuters had forecast the report would show private employment increasing by 95,000 following a previously reported gain of 37,000 in May.

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Nela Richardson, chief economist, ADP. “Still, the slowdown in hiring has yet to disrupt pay growth.”

“Use ADP only to gauge the big picture,” said Carl Weinberg, chief economist at High Frequency Economics. “Right now, that picture shows ADP’s private sector employment estimates declining steadily since December. The big drop underscores that decaying trend.”

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Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media