The American jobs machine slipped a gear in June. The world’s largest economy added just 57,000 jobs last month, barely half the 110,000 that Wall Street had pencilled in and the first undershoot in employment growth since the US-Iran war began.
The figure, published by the Bureau of Labor Statistics, is the weakest since payrolls contracted by 155,000 in February. Yet the report was not uniformly gloomy: the unemployment rate fell to 4.2 per cent from 4.3 per cent, defying forecasts of no change.
Much of the disappointment centred on the football World Cup, which kicked off on June 11 across 11 US host cities. Analysts had expected the tournament to lift hiring in hospitality and related sectors. Instead, payrolls in food and accommodation fell by 55,000. “We haven’t seen any major indication of World Cup related hiring yet,” said Shruti Mishra, US economist at Bank of America.
That is not to say the tournament has left no trace. Host cities have reported a 5 per cent rise in spending at restaurants and bars during the competition, against an average of 3.8 per cent across the rest of the country, according to Bank of America’s credit card spending data. The spending is flowing; the jobs, so far, are not.
The broader picture is one of deceleration on both sides of the ledger. The public sector generated 8,000 jobs, down from 32,000 in May, while the private sector added 49,000, down from 97,000. Jobs growth was strongest in education, professional and business services, social assistance and healthcare. Figures for April and May were revised down by a cumulative 74,000, with the losses concentrated in leisure and hospitality, a pattern familiar to readers who have followed the slowdown in the US jobs market over the past year.
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