America’s workforce is shrinking. What’s going on?
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Why did the unemployment rate fall in June but economists warn 'not so fast'?
The unemployment rate fell in June, and normally that's good news. But economists are saying not so fast. The U.S. added just 57,000 jobs in June, while previous months were revised down. Also, the labor force participation rate fell. In other words, the job market may look steadier on paper than it really is. Hello and welcome to USA Today's The Excerpt. I'm Dana Taylor. Today is Wednesday, July 22nd, 2026. Here to dig into the numbers and explain what's really going on is USA Today money reporter Rachel Barber. It's so good to have you here, Rachel. Yes, thanks for having me, Dana.
How can a falling labor force participation rate make the jobs picture look misleading?
So let's start with the basic tension in this latest jobs report. The unemployment rate fell in June, but economists say that may have happened for the wrong reasons. Why?
So the unemployment rate, if you break it down, is really just a function of how many people are unemployed that would like to be employed. And so what economists are saying is given the fact that the labor force participation rate fell, which the labor force participation rate is just a fancy way of saying the percent of people 16 and older who are looking for work or working, saying because that fell, The unemployment rate dropping from 4.3 to 4.2 percent is most likely more so a function of the fact that people have just stopped applying for jobs rather than the fact that a lot of people are getting hired. So that's a troubling sign in what would usually be considered a bright spot in this jobs report.
Rachel, I mentioned that the US added just 57,000 jobs in June, while previous months were revised down. Just how weak is that number?
So when you compare it to other months this year, the U.S. has added well over 100,000 jobs in the prior three months, for example. We saw negative job growth or job losses in February, but every other month this year has been positive. But when you compare it back to 2025, for example, the U.S. added... only 181,000 jobs over the entire year. So in a way, this is kind of on track or even a little bit of an improvement from the averages we saw last year. But also last year was a historically weak year for hiring in the United States. So it kind of depends on your timeline. But for the most part, this is a weak print.
There's an argument to be made that the economy may not need as many new jobs each month to keep unemployment stable, especially if immigration is slowed. If we follow that logic, does that make this report feel less alarming or is that too simple?
I think that that's a valid point for economists to point out, and they have. And I think overall, I would just say that this is just one month, and this is an estimate that will be revised next month and the following month after that. And Federal Reserve Chair Kevin Warsh, when he was recently testifying in front of the Senate, he also made that point saying that this is just one jobs report. We're going to need to see some more data to solidify this as a trend. But for now, just sort of one troubling sign. But we'll have to wait and get some more data in the next couple of months.
When we say people are leaving the workforce, who exactly are we talking about?
So that's the interesting thing is that for most age groups and most demographic groups, the labor force participation rate is down. It's not down for absolutely everyone, but generally it's down across the board. In particular, the labor force participation rate for older workers, those 55 and up, is fell to a 21-year low in June. And so that is sort of the standout group. We've also seen women leave the workforce in sort of record numbers over the last couple of years. And we can get into some of the reasons why. But overall, I think economists are a bit concerned that this isn't just something we're seeing in one specific group. We're seeing it in several groups.
What are some of the reasons why?
So there's probably as many reasons why you would leave the workforce as there are people leaving the workforce. It's a very personal decision, obviously, but there are some trends that we can sort of pull out.
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