The June jobs report arrived with a surprising jolt of optimism, but a closer look reveals a more complicated picture for the U.S. labor market and the broader economy. On the surface, the numbers were encouraging: employers added 147,000 jobs, well above the 110,000 predicted by economists polled by Dow Jones, and the unemployment rate dipped to 4.1% instead of the expected 4.3%. Initial jobless claims came in 3% lower than projected, and job openings reached 7.8 million, surpassing forecasts of 7.3 million.
Yet, beneath these headline figures, the details paint a less reassuring story—especially for commercial real estate and white-collar workers. According to the Bureau of Labor Statistics, much of the job growth was concentrated in healthcare and state government, sectors that do little to relieve the mounting pressures on office landlords. Bill Adams, chief economist at Comerica Bank, noted in an emailed statement that “June’s job losses were concentrated in white collar industries,” attributing the slowdown in private hiring and pay growth to tariffs, policy uncertainty, and the ongoing Israel-Iran conflict. Data from ADP underscored this weakness, showing a net loss of 33,000 jobs in the private sector.
If state education and government jobs are excluded, June’s job gains would have dropped to just 84,000. State hiring, while positive for public employment, does little to offset the decline in federal jobs—down by 7,000 in June—which further reduces demand for office space. Major industries such as construction, manufacturing, wholesale and retail trade, transportation and warehousing, information, financial activities, professional and business services, leisure and hospitality, and other services were essentially flat, offering little hope for a broad-based recovery.
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Other indicators in the jobs report highlighted growing vulnerability. The number of discouraged workers—those who have stopped looking for work because they believe none are available—jumped by two-thirds, rising by 256,000 to 637,000. The ranks of those marginally attached to the labor force swelled by 15% in a single month, reaching 4.47 million, a group that typically remains steady.
Despite these warning signs, some analysts see resilience in the labor market. “While signs of deceleration persist, today’s report highlights a labor market that is proving more resilient than anticipated,” wrote Becky Frankiewicz, president and chief strategy officer of ManpowerGroup, in an emailed statement. She cautioned, however, that “the top-line numbers look positive, but our real-time data reveals underlying shifts. June marked the weakest hiring month of the year, with new postings down 7% month-over-month and 2% year-over-year. Open postings fell 8% from May”.
Young Americans are feeling the brunt of these shifts most acutely. According to the Federal Reserve Bank of New York, people aged 22 to 27 are facing economic headwinds that their predecessors did not encounter at the same stage of life. Instead of moving out and establishing households, many are struggling to gain a foothold in the labor market, with economic realities threatening to delay or derail their progress.
The situation for recent college graduates is particularly troubling. In March 2025, the unemployment rate for graduates aged 22 to 27 was 5.8%, compared to 6.9% for all workers in the same age group. By contrast, the overall unemployment rate for all college graduates was just 2.7%, and for all workers, it was 4%. This divergence between recent graduates and the broader labor force first emerged in 2018 and has only intensified since the pandemic, with little sign of improvement on the horizon.
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