U.S. economy adds 57,000 jobs in June as the unemployment rate dips to 4.2%

The U.S. economy added 57,000 jobs in June. That was less than expected. The unemployment rate coming in at 4.2%. We've got NBC News business and economy reporter, Ali Kanal, at the big board. Also joining us, Investopedia's editor-in-chief and chief business editor of People, Inc., Caleb Silber. Good morning to both of you. Ali, let's start with you. Walk us through the numbers, how they compare with previous months. Yeah, well, as you said, Joe, coming in below expectations here. So the estimate was 115,000 jobs added in June. That coming in at 57,000. So just around half that was expected. We also got downwardly revised numbers for both April and May. April, remember we had that blowout jobs report, 179,000 jobs added. That was revised lower by 31,000 to 148,000 jobs. And then in May, same thing, 172,000 jobs added last month. Not necessarily true. That was revised down by 43,000 jobs to 129,000 here. Now the good news is that the unemployment rate did come in a touch below expectations here at 4.2%. So coming down a little bit, and that honestly is pretty low by historical standards here. You can see we had some choppiness right here is when you had that government shutdown. So a bit of lag in the data here, but 4.2% is pretty good. The issue though is that a lot of folks out there that are looking for jobs, they're having a difficult time finding one. It's what's been described by economists as low hire, low fire. And that's what makes this a tricky job market right now, Joe. All right, Caleb, let's bring you in here. Obviously these numbers are surprising below what was expected. What does this tell us about the economy right now? Especially because I mean, the World Cup's happening in all these cities across America. So we thought, well, we'd see a big boost there too. Ali will give you the sector breakdown in a second, but leisure and hospitality is where exactly we thought we would see those job gains because of the World Cup, because of a lot of summer events going on. But we actually saw steep job losses there. And Ali mentioned the unemployment rate of 4.2%. Yes, low, right near the Fed's target. But the labor force participation rate, only 61 and a half percent. That is very low. Not terribly low, but low by historical standards. Tells you more people are leaving the workforce than are actually entering. All right, so Ali, let's break it down by industry. Where are we seeing the biggest losses and the biggest gains? Well, as Caleb mentioned, you know, the World Cup, there was a lot of jobs that were added to the leisure and hospitality sector last month. So there were some warning signs that this could be the start of a summer slowdown. So leisure and hospitality falling by 61,000 jobs there. Now, healthcare, that continues to be the sector that continuously adds jobs over and over again. We saw 22,000 jobs added here as the aging population really requires a need for these healthcare workers. Manufacturing, a pretty good barometer on the economy. Pretty much little change there, just around 3,000 jobs added. And we do know that the manufacturing sector has been expanding over the past few months. And then construction, we saw 11,000 jobs added, typically seasonally, better weather. You have more infrastructure projects, you have more house building in the works there. Construction, also a good sector to watch as we continue to monitor that AI build out as well, Joe. So Caleb, here's the challenge. You need to try and cool inflation, but then maybe you also want to try and boost the market, the job market. So if you're Kevin Warsh, who's rather tight-lipped these days, ahead of the next Federal Reserve meeting, which is in? 27 days, five hours and 20 minutes. I'm not counting, you're counting, but he's not worried about the jobs market. He told us as much yesterday at a speech in Portugal. He said, it's inflation that we care about. And if you think, he said, that the Fed is comfortable with inflation north of 2.5%, you are very wrong about that. So the Fed is gonna be focused on inflation right now. There is a 30% chance of a rate hike at that July 29th meeting. Roll the tape forward to September 16th, a 50% chance. We'll see if that sticks, given the upcoming inflation numbers and more jobs dated to come in the next month. Allie, while we're talking about inflation, we also have to talk about wages. What are we seeing when it comes to wage growth? So coming in at expectations, 3.5%, but look at where inflation's at, at 4.2%. So once again, inflation that's eating into your paycheck. That's a trend we've been seeing over the past several months. Now back in May, wage growth was 3.4%. So a little bit of an uptick there. We will see if this number can come down. We'll get fresh inflation data over the next couple of weeks. We do know that energy prices have fallen as there's been easing tensions between the US and Iran that will likely be a positive thing on inflation. But this is why when you're out shopping at the grocery store, when you're buying things, you probably feel that pressure a bit more because inflation is just eating into those paychecks. We obviously all don't want. Yeah, and everyone's feeling that. So Caleb, big picture when your wages are going up but not enough to meet that inflation, just what does that mean for our wallets, how we manage our expenses, how we manage our bills? Yeah, this is the way it's going to be for a while. Interest rates are not gonna change. So expect to pay those higher interest rates and I wouldn't expect prices to come tumbling down. Maybe they will at the gas station. The rest of the supply chain is gonna take a while, maybe a couple months. 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