The U.S. labor market cooled in June with employers adding 57,000 jobs, falling short of the 110,000 economists had expected and sharply decelerating from May’s reading of 129,000.

The unemployment rate edged down to 4.2%, below the 4.3% consensus.

Average hourly earnings rose 0.3% on the month, matching the 0.3% expected, and were up 3.5% from a year earlier. Economists had looked for annual wage growth to quicken from 3.4% to 3.5% .

The April nonfarm payrolls gain was revised lower to 148,000 from the previously reported 179,000, while May payroll growth was cut to 129,000 from 172,000. Combined, the revisions reduced employment gains for the two months by 74,000 jobs.

The data is the first employment reading since the Fed’s June 17 meeting, when Chair Kevin Warsh‘s committee held rates at 3.50% to 3.75% but turned its projections sharply hawkish.

The median policymaker now sees rates ending 2026 higher than today, and nine of eighteen officials penciled in at least one hike, a striking reversal from March, when the median still implied a cut.

This is a developing story…

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