Hiring Misses, Home Prices Climb

June hiring came in below expectations, while home prices continued to move higher with another month of solid gains. Here are the key takeaways.

·       June Jobs Report Falls Short of Forecasts

·       ADP Report Shows Modest Private-Sector Hiring

·       Other Labor Market Data Paints a Mixed Picture

·       Home Prices Continue to Build on Recent Gains

June Jobs Report Falls Short of Forecasts

June job growth came in well below expectations, with the economy adding 57,000 jobs compared with the 110,000 forecast. Payroll gains for April and May were also revised lower by a combined 74,000 jobs. Meanwhile, the unemployment rate edged down from 4.3% to 4.2%.

What’s the bottom line? The underlying details were softer as well. Full-time employment declined by 514,000 jobs, while part-time employment also fell by 53,000.

It's also worth noting where job growth is occurring. Much of the recent hiring has been concentrated in education and healthcare, sectors that tend to be supported by long-term demographic trends and not necessarily signaling broad-based strength across the overall economy.

Finally, while the lower unemployment rate appears encouraging, it came with an important caveat, as the decline was driven largely by a 720,000 drop in the labor force.

ADP Report Shows Modest Private-Sector Hiring

According to ADP, private employers added 98,000 jobs in June, below expectations for roughly 110,000 new jobs. Hiring increased across businesses of all sizes, with small businesses leading the way.

What’s the bottom line? Hiring wasn't broad-based. About half of all new jobs came from the education and health services sector, while hiring across most other industries was more modest.

Workers who changed jobs saw pay increase by 6.6% over the past year, compared with 4.4% for those who stayed with their employer. Job switchers continue to receive larger raises, but the gap has narrowed considerably from recent years, suggesting the labor market has become less competitive.

Other Labor Market Data Paints a Mixed Picture

Job openings were stronger than expected in May, rising to 7.6 million versus forecasts for 7.3 million. However, the actual number of available jobs may be somewhat lower, as some remote positions are posted in multiple locations. Hiring was also supported by temporary demand related to the World Cup, with leisure and hospitality job openings increasing by 95,000 and accommodation and food services adding 62,000 openings.

Initial unemployment claims remain relatively low at around 215,000. However, that figure may not capture all labor market stress, as some displaced workers are choosing gig or freelance work instead of filing for unemployment benefits.

At the same time, continuing unemployment claims remained elevated at 1.81 million, suggesting many unemployed workers are taking longer to find new jobs.

Separately, Challenger, Gray & Christmas reported approximately 46,000 job cuts in June, down from about 97,000 in May. AI-related restructuring was cited as the leading cause of layoffs for the fourth consecutive month. On a positive note, announced hiring plans year-to-date are up about 10% from 2025.

What’s the bottom line? While some labor market indicators remain resilient, others point to softening in hiring conditions.

Home Prices Continue to Build on Recent Gains

U.S. home prices rose 0.8% from March to April, following a 0.7% increase in March, for a total gain of 1.5% over the two-month period. After adjusting for normal seasonal patterns, prices were essentially flat, but home values remain 0.8% higher than they were a year ago.

Separate data from the Federal Housing Finance Agency (FHFA) told a similar story. While seasonally adjusted prices were mostly flat in April, actual home prices increased 0.7% in April, 1.0% in March, and 0.9% in February – a combined gain of 2.6% over those three months. Home prices also rose 2.0% from a year earlier for homes backed by conventional loans.

What’s the bottom line? Seasonal adjustments can make price growth appear muted, but national home values have continued to trend higher this spring. For buyers and homeowners, steady appreciation can make a meaningful difference over time. For example, a $500,000 home that appreciates 4% would gain about $20,000 in value over a year.