Flash Report: June’s Unemployment Rate Falls as More People Find Jobs
KEY TAKEAWAYS
- The U.S. unemployment rate declined to 4.1% in June after holding at 4.2% in May. More precise data show the rate edged down to 4.117% from 4.244%, respectively.
- Our analysis of labor market flows indicates stable and historically robust employment conditions.
Unemployment
June 2025
4.117%
Precise Rate
The U.S. labor market has been remarkably stable since May 2024. The jobless rate has stayed within a narrow range of 4.0% to 4.2%, consistent with full employment. The concerning signs of labor market deterioration observed in May’s employment report, particularly related to an increase in job separations leading to unemployment, did not persist in June.
The following analysis focuses on how estimated flows into and out of unemployment during June affected the overall unemployment rate.
DATA HIGHLIGHTS
- While the headline unemployment rate ticked down to 4.1% in June, the unrounded rate shows a slightly larger decline of 0.13 percentage points.
- The change in the unemployment rate was primarily driven by an increase in the number of unemployed people finding jobs.
| Average Monthly Change in Unemployment Rate (Percentage Points) |
People Losing or Leaving Their Jobs and Becoming Unemployed |
Unemployed People Finding Jobs |
People Previously Not in the Labor Force Who Are Now Seeking Work |
Unemployed Workers Leaving the Labor Force (e.g., Discouraged Workers) |
|
|---|---|---|---|---|---|
| June 2025 | -0.13 | 0.99 | -1.17 | 1.04 | -0.99 |
| Last 3 Months | -0.01 | 0.98 | -1.10 | 1.07 | -0.98 |
| Last 12 Months | 0.00 | 0.96 | -1.07 | 1.05 | -0.95 |
| SOURCES: Bureau of Labor Statistics and Research staff’s calculations. | |||||
| NOTES: Data are seasonally adjusted. The overall change is based on the precise unemployment rate for these periods; for example, the unemployment rates were 4.1172% in June and 4.2443% in May. The flow components into and out of unemployment add up to the change in unemployment with a negligible residual. See Maximiliano Dvorkin and Serdar Ozkan’s St. Louis Fed On the Economy blog post “The Recent Ins and Outs of Unemployment: Using Flows to Study Labor Market Dynamics” for more information about this method. | |||||
The 0.13 percentage point decline in June’s unemployment rate is consistent with stable employment conditions. Recent policy initiatives, such as tariff changes, do not appear to be making any notable changes in the unemployment rate.
The flow components of unemployment showed very little change last month. They all remain close to their last 12-month average, as shown in the table above. The decline in the jobless rate can be attributed primarily to an increase in the number of unemployed people finding jobs.
Analysis of different labor market data show the labor force participation rate continued to decline in June, by 0.10 percentage points after a 0.30 percentage point decline in May. This downward trend may be related to demographic changes (aging) of the U.S. population.
Citation
ldquoFlash Report: June’s Unemployment Rate Falls as More People Find Jobs,rdquo St. Louis Fed On the Economy, July 3, 2025.
This blog offers commentary, analysis and data from our economists and experts. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.
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