Job growth within state and local governments was a significant driver of the expansion witnessed in the U.S. labor market during June.
According to federal data released Thursday, government sector jobs experienced the most substantial growth in a month-over-month comparison, with an increase of 73,000 positions. This surge in government employment represented nearly half of the overall increase of 147,000 nonfarm payrolls reported for the month.
Mark Hamrick, senior economic analyst for Bankrate, stated, “Government at the state and local levels did much of the hiring in June,” which contributed to surpassing expectations for total payroll figures.
Drilling down into the data, it appears that the job increases were primarily outside of the nation’s capital.
Specifically, state government payrolls expanded by 47,000 positions, while local governments contributed an additional 33,000 jobs. A significant portion of these roles were within the education sector, as indicated by data from the Bureau of Labor Statistics.
Conversely, the federal government saw a reduction of 7,000 jobs over the same period, a development aligned with ongoing efficiency initiatives pursued under the Trump administration.
However, Hamrick cautioned that sustaining such robust growth in state and local government roles may prove challenging.
In addition to government jobs, the health care and social assistance sectors experienced significant monthly growth, adding over 58,000 positions. Together with government roles, these two sectors were responsible for nearly 90% of the total job growth in June.
Further analysis of the data reveals that industries such as leisure and hospitality, as well as construction, also experienced notable payroll increases during the month.
On the downside, overall labor force growth was hindered by job losses in several sectors, notably professional and business services, manufacturing, and wholesale trade, each shedding around 7,000 net jobs in June.
