Despite a recent uptick, job growth isn't as promising as it seems

The big economic data of this week is the June jobs report from the Bureau of Labor Statistics, which will drop Thursday morning. That’s a day earlier than usual, thanks to the Independence Day holiday this coming weekend.

After a pretty stagnant 2025, the labor market has picked up in the last few months, adding more than 170,000 jobs each month since March, so it’s worth looking at what has driven growth in the labor market, and where it might be headed.

For most of last year, healthcare was one of the only industries consistently adding jobs, according to Nicole Bachaud, a labor economist at ZipRecruiter.

“But when we come into the last couple of months this spring, we've started to see gains equaling out a bit across different industries,” Bachaud said.

Local governments started hiring more. So did social assistance organizations like childcare and home care aides. Last month, leisure and hospitality companies like restaurants and hotels staffed up too — possibly boosted by the World Cup.

“Those aren't the lockdown, career jobs that make people feel really good about the economy,” said Ron Hetrick, senior labor economist at Lighcast.

Meanwhile, professional industries — banking, insurance, and tech — are stagnant or even shedding jobs. That’s frustrating to a certain class of workers.

“What they want to see is, ‘are these white-collar better-paying industries hiring?’” Hetrick said. “And the reality is, no, they're not.”

So, some workers who might otherwise try to climb the corporate ladder may be opting for lower-paid work.

“We're seeing a lot of maybe established, experienced workers going and taking entry-level positions,” Bachaud said. “And that's leaving less room for somebody with no resume and no work experience to break into the market.”

Especially new graduates. Michele Evermore, a senior fellow at the National Employment Law Project, said that’s who she’ll be keeping an eye on when the June jobs report drops this week.

“I'm hearing that people newly graduated are having trouble finding work, and June is where we will see them succeed or fail,” she said.

Evermore said she’s concerned about “fraying around the edges” in the job market. Along with youth unemployment, she’s also watching Black unemployment and unemployment among people with disabilities. If those numbers rise, it could be a sign of a weaker job market to come.