State and Local Government Job Growth Powers U.S. Labor Market Expansion in June

State and local government job growth played a significant role in driving the expansion of the U.S. labor market in June. According to data from the federal Bureau of Labor Statistics released on Thursday, government jobs saw the largest month-over-month sector growth at 73,000. This means that government jobs accounted for approximately half of the total nonfarm payroll growth of 147,000 in June.

“Government at the state and local levels led the hiring spree in June,” said Mark Hamrick, senior economic analyst at Bankrate. This surge in hiring helped the total payrolls number exceed expectations.

State government payrolls increased by 47,000 jobs, while local governments added 33,000 jobs. The majority of these new positions at both levels were in the education sector, as indicated by the data.

On the contrary, federal government payrolls experienced a decline of 7,000 jobs in the same month. This decrease is not surprising given the ongoing government job-cutting initiatives under President Donald Trump’s administration.

Hamrick from Bankrate cautioned that it might be challenging for state and local governments to sustain such robust growth in the long term.

Health care and social assistance saw the next significant monthly growth, with over 58,000 new positions added. When combined with government jobs, these two sectors contributed to nearly 90% of the new jobs created in June.

Other industries that witnessed substantial payroll expansions in June included leisure and hospitality, as well as construction, according to the BLS data.

However, overall labor force growth was limited by contractions in various sectors. Professional and business services, manufacturing, and wholesale trade each saw a loss of around 7,000 net jobs in June.