FX.co ★ US Unemployment Falls in June as Labor Force Shrinks

The US unemployment rate edged down to 4.2% in June 2026 from 4.3% in May, coming in below expectations, largely because many people exited the labor force. The number of unemployed fell by 213,000 to 7.09 million, while total employment declined by 507,000 to 162.26 million. As a result, the labor force shrank by 720,000 to 169.36 million, and the participation rate dropped to 61.5%, its lowest level since March 2021. The employment-population ratio also slipped to 59.0%, the weakest reading in more than four years. The broader U-6 underemployment rate, which captures discouraged and underemployed workers, eased to 7.9% from 8.1%.