U.S. job growth slowed in June and Americans left the labor force in droves, according to a government report on Thursday that could tamper expectations for a September interest rate hike from the Federal Reserve.
Nonfarm payrolls increased 223,000 last month, the Labor Department said. Adding to the report’s soft note, April and May data was revised to show 60,000 fewer jobs were added than previously reported.
With 432,000 people dropping out of the labor force, the unemployment rate fell two-tenths of a percentage point to 5.3%, the lowest since April 2008.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell to 62.6%, the weakest since October 1977. The participation rate had touched a four month high of 62.9% in May.
In addition, average hourly earnings were unchanged, taking the year-on-year increase to a tepid 2.0%.