The U.S. economy added 57,000 jobs in June, the smallest gain since February’s decline, according to the U.S. Bureau of Labor Statistics. Downward revisions to April and May estimates subtracted 74,000 jobs from previously reported totals. The unemployment rate also dropped to 4.2%, essentially unchanged from June 2025.

Wage growth accelerated modestly in June. Average hourly earnings rose 3.5% from a year earlier to $37.64, up from a 3.4% year-over-year pace in May. This pace is 0.3 percentage points lower than a year ago. Importantly, wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases, according to an analysis from the NAHB.

The unemployment rate declined to 4.2% in June from 4.3% in May. The improvement was driven by a shrinking labor force rather than stronger hiring. Over the month, the number of unemployed persons fell by 213,000 to 7.1 million, while the number of employed persons declined by 507,000. Combined, the civilian labor force contracted by 720,000 in June.

Construction Employment

Employment in the construction sector rose by 11,000 jobs in June, following a gain of 6,000 in May. Within the industry, residential construction employment declined by 8,600, while non-residential construction added approximately 19,900 jobs.

Residential construction employment now stands at 3.3 million in June, including 916,000 workers employed by builders and remodelers and 2.4 million residential specialty trade contractors.

Meanwhile, the unemployment rate for construction workers rose to 6.2% in June on a seasonally adjusted basis, up from 5.2% in May and 3.7% in April. This marks the second consecutive monthly increase and the highest reading since July 2021. A year earlier, the construction unemployment rate stood at 4.5%. The continued increase suggests softness in construction labor market conditions.