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WASHINGTON — The U.S. economy is confronting simultaneous labor market weakness and trade policy uncertainty as the July 4th holiday approaches, with fresh data and diplomatic moves pointing to a more fragile outlook. Bureau of Labor Statistics figures show employers added 57,000 jobs in June, about half of economists’ expectations and the weakest non-farm payroll gain in recent cycles, while April and May estimates were revised down by a combined 74,000. The unemployment rate edged down from 4.3% to 4.2%, but the labor force participation rate fell 0.3 percentage points to 61.5%, as 720,000 people left the labor force. Long-term unemployed, defined as those jobless for 27 weeks or more, held at 1.9 million and represented 27.3% of all unemployed. Sector data showed professional and business services adding 36,000 jobs, healthcare gaining 22,000 jobs, and social assistance employment rising by 25,000, while leisure and hospitality shed 61,000 positions, driven largely by a 55,000-job drop in accommodation and food services despite major events such as the co-hosted FIFA World Cup and preparations for the 250th Independence Day celebrations. WASHINGTON — Broader indicators presented a mixed picture, with initial applications for unemployment benefits slipping by 1,000 to 215,000 in the week ending June 27 and the four-week average falling to 222,000, while hourly earnings grew at an annual pace of 3.5%, slightly above May’s 3.4%. The Federal Reserve kept its benchmark federal funds rate in the 3.5% to 3.75% range, and Chair Kevin Warsh said inflation risks had eased. Parallel data highlighted ongoing restructuring in the corporate sector, particularly in technology, where global firms cut nearly 154,000 jobs in the first half of 2026, compared with 246,000 in all of 2025. Challenger, Gray & Christmas reported that U.S. employers announced 45,849 job cuts in June and 443,604 in the first six months of 2026, the second-highest January-to-June total since 2020, with the tech industry leading the reductions and companies citing the impact of artificial intelligence on staffing plans. On the trade front, the Trump administration formally declined to renew the United States-Mexico-Canada Agreement on its existing six-year review terms at a built-in deadline that required a joint decision by the three partners. U.S. officials said persistent trade deficits with Mexico and Canada drove the decision, which leaves the pact in force but subjects it to annual reviews while negotiations continue. President Donald Trump and U.S. Trade Representative Jamieson Greer said Washington would push to address what they described as shortcomings in the deal, as Mexico and Canada signaled they would continue talks to preserve the $2 trillion North American trade framework.

Prepared by Christopher Adams and reviewed by editorial team.