The U.S. labor market continued to show resilience in June, with steady job gains led by state/local government and health care sectors. The unemployment rate edged down to 4.1%, signaling ongoing strength in hiring despite persistent economic uncertainty. However, there were some indications that the headline number overstated the health of the labor market, including slowing wage growth and much of the job gains concentrated in state/local government.

In June, wage growth slowed. Year-over-year, wages grew at a 3.7% rate, down 0.1 percentage point from the previous month. Wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.